Middle East Conflict: Counting the Shocks on the Global Economy and Impact on Financial Markets

It’s Day 11 of the war and financial markets have been roiling by the impact of the Iran War, with disruptions to the energy market in focus. For oil and gas, our base case scenario is a two-week disruption, and we project Brent crude averaging $90/bbl over March and April and European gas (TTF) at €50/MWh, with severe, prolonged outages potentially driving Brent to $119/bbl and TTF to €108/MWh over the same period. Whilst the magnitude of any oil price spike can be moderated by strategic reserves, gas markets will need to balance via demand destruction. Metals are also affected as supply shoc...

イラン戦争はアメリカ例外主義を呼び戻す

February CPI Preview

Core CPI prints have remained within a fairly narrow band in the last several readings and we expect more of the same for February . After rising post-Liberation Day, core goods price increases were muted in the December and January inflation reports, but we feel there is upward pressure that will be realized in the coming months. More problematic for policymakers is the recent uptick in core services excluding housing (aka supercore), which is closely followed by policymakers. Because physical inputs are only a small portion of service firms’ costs, firmer services prices cannot be largely ...