Asks if the market is behaving correctly given the severity of the conflict or underpricing risks.
Francine Lacqua
Themos Fiotakis
If the Strait of Hormuz stays closed for weeks, we are not priced for it in terms of commodity prices or their implications for bonds and equities.
Asks about the impact on inflation and the central bank reaction function, given the war's uncertain duration.
Francine Lacqua
Themos Fiotakis
Bond markets are focused on inflation here and now, but this may not be the most pressing angle as economies have weathered bigger shocks.
Themos Fiotakis
Two main angles: 1) A reminder of Europe's big vulnerability due to reliance on energy from dangerous locations. 2) The market is oscillating between what to buy for a resolution and where to get insurance for an energy shock hitting hardest.