Support
Global Macro Analysis
The latest financial, market & economic analysis
Oil futures vs physical oil: why the market may be underpricing the Hormuz supply shock
The oil futures curve is sending a calmer message than the physical market warrants. With roughly 15 million barrels a day still bottled up around the Strait of Hormuz and global inventories being drained at an extraordinary pace, the front end of the market has reacted, but longer-dated prices remain surprisingly restrained. That disconnect matters because it risks understating both the scale of the current supply shock and the amount of higher prices that may still be needed to restore balance
Gold is being pulled in two directions
Gold enters Q2 in a more complex environment than initially expected. What looked set to be a quarter driven primarily by safe-haven demand has evolved into a broader interplay between geopolitics, energy prices, inflation expectations and rate sensitivity.
Sticky inflation is cornering the BoE
In Q2 the Bank of England is facing a difficult trade-off. Inflation remains stubborn, growth is weak and public finances are under increasing strain. Together, these forces are limiting policy flexibility and reinforcing the case for rates to stay higher for longer.
Japan hit by inflation, policy and trade pressures
Japan’s economic outlook is tightening, as persistent inflation, energy-driven uncertainty and weakening trade dynamics come together to create a more constrained and less predictable environment.
Silver is under pressure and the next move matters
Silver has already seen a record rally, a sharp supply shock and a historic one-day collapse, all within weeks. Now, as Q2 begins, geopolitics, policy and positioning are starting to collide, leaving the outlook far less clear.
Oil has repriced but the risk hasn’t gone away
Oil’s outlook has shifted from extreme supply panic to cautious stabilisation. The peak crisis premium has eased, but the market is still likely to trade with a structurally higher risk floor, reflecting the fragility of the ceasefire, constrained supply flexibility and the enduring strategic vulnerability of Hormuz.
Europe’s recovery is being tested again
Europe’s recovery was starting to take hold, but the environment has shifted again. A new external shock is feeding through energy markets and trade, just as growth remains fragile. The result is a more complex outlook, where inflation risks are rising and policy choices are becoming harder.
The Fed is stuck between inflation risk and slowing growth
The Federal Reserve enters Q2 facing a familiar challenge in a more complex form. Markets have reacted quickly, but for policymakers, the real question is what comes next. An energy-driven shock has hit as inflation was easing but not yet under control, while growth is slowing but not breaking. That leaves the Fed with little room for error, making patience the most likely path.
How many more inflation shocks can the Fed afford to look through?
The Federal Reserve has spent years arguing that inflation spikes tied to supply shocks should not automatically trigger a policy response. That logic still holds, at least for now. But after yet another surge in consumer prices — this time driven by the Iran-linked energy shock — the harder question is no longer whether the Fed should react immediately, but how many more “temporary” shocks households and businesses will tolerate before they stop believing inflation will ever return to 2%.
Japan inflation risks rise as war and policy collide
Japan is once again being pulled into a familiar problem rising inflation driven by forces largely outside its control. The shift is already visible in markets. Japanese government bond yields have climbed to their highest levels since 1999, signaling not just rising inflation expectations but also a lack of natural buyers at current levels.
6 Apr 2026, 09:24