The first quarter of 2026 marked a notable shift from the relatively supportive conditions seen through much of 2025. Markets entered the year with optimism, underpinned by easing monetary policy, improving global manufacturing data, and resilient corporate earnings. However, this constructive backdrop was increasingly challenged - and ultimately overshadowed -
Global markets were dominated by a geopolitical energy shock from the US–Iran conflict, driving inflation risks, growth downgrades, and volatility, temporarily offset by a ceasefire-triggered risk rally, but leaving a fragile and uncertain macro outlook. Download PDF
Across all regions, the dominant macro driver is clear: Geopolitics → energy shock → inflation → tighter financial conditions Download PDF
Geopolitical tensions in the Middle East, particularly the Iran conflict and Strait of Hormuz risks, dominated markets and politics worldwide, driving energy price volatility, shaping economic policy, and overshadowing domestic macroeconomic trends. Download PDF
Geopolitical tensions in the Middle East, particularly the Iran conflict and Strait of Hormuz risks, dominated markets and politics worldwide, driving energy price volatility, shaping economic policy, and overshadowing domestic macroeconomic trends. Download PDF
February ended dramatically with joint US-Israeli strikes on Tehran killing Ayatollah Khamenei, sparking a repricing of risk assets as oil surged on Strait of Hormuz closure fears and inflation expectations jumped, taking rate cuts off the table. Beneath the geopolitical shock, markets told a broader story: ex-US equities outperformed significantly
The week’s dominant theme across regions was geopolitical energy shock → inflation risk → market volatility, all reshaping expectations for monetary policy and growth globally. Download PDF
The US–Israel strikes on Iran, including the killing of its supreme leader, have sharply escalated conflict and energy risks, provoking global condemnation, fears of wider war, and increased volatility in oil markets and financial conditions. Download PDF
The dominant financial theme was a sharp escalation in global trade tensions driven by new US tariffs, which disrupted global supply chains, weakened trade outlooks, and reshaped relative competitiveness between major economies. Download PDF