Michaël Lok

Following the announcement of a two-week US–Iran ceasefire on Tuesday, 7 April, risk assets were supported by the perception that the worst may have been avoided.

Headlines about a potential ceasefire in the Middle East have started to appear, though visibility on the geopolitical outcome remains limited.

The recent escalation in the Middle East has materially changed the tone of markets and prompted us to revise our base case scenario, notably on energy.

As the Middle East conflict enters its fifth week, recent developments are pointing to a clear shift from an initial oil disruption towards a broadening supply shock.

The Swiss franc is once again confirming its status as a major reserve currency, one that is particularly significant at a time when instability in the Middle East is causing major turbulence in global geopolitics. However, the franc’s secular strength has a downside.

The prospect of a prolonged Middle East conflict is unsettling financial markets, as investors weigh the potential macroeconomic consequences.

As a new global order takes shape and regime-change dynamics heighten geopolitical risks, gold remains a strategic allocation amid rising Middle East tensions, while disciplined risk management helps to contain drawdowns.

The outbreak of a new Middle East conflict involving the US, Israel, and Iran rattled financial markets last week, triggering a broad risk-off shift.

The developments in the Middle East over the weekend mark an expanded regionalisation of previous conflicts, heightening the risk of a more prolonged crisis that could weigh on oil prices if tensions persist over the coming weeks.