Markets are pricing some risk but operating on the assumption oil will revert to $80-90 by mid-summer.

Investor positioning has improved (less bearish). There hasn't been significant capitulation, just adjustment and hedging, as markets expect de-escalation.

Focus on structural advantages: Tech (AI capex), European strategic autonomy (defense), and energy sufficiency (renewables deployment).

These areas have rerated the most and are expected to sustain performance.

The biggest risk is prolonged elevated oil prices leading to broader demand destruction and growth revisions.

Diversification away from oil is a longer-term supply-side story.

Will see divergence in monetary policy responses based on how inflation manifests and each economy's oil/food CPI weight.

Emerging markets like India, where food is a big CPI component, will be particularly impacted.

Fed is in 'wait and see' mode, anchored by elevated inflation. A cut later in the year is plausible only if conflict sustains and deteriorates growth.

Stagflation is a risk scenario, not the central one, as markets aren't yet pricing in sustained high oil prices and anchored inflation expectations.