Markets face uncertainty

Macroeconomic update for April 2026

Daily headlines about the war in Iran are gripping markets, with uncertainty leaving investors unsure of next moves. The question of whether a deal will be reached, combined with concern that a closure of the Strait of Hormuz could choke growth and lead to a stagflationary environment, has kept sentiment rather muted. Still, when looking at asset class performance, the market reaction appears far less dramatic than the headlines might suggest, with equities modestly in negative territory and far from capitulation levels. So, what are some of the possible scenarios in the Middle East conflict? And what does it mean for the Multi Asset Boutique’s outlook and asset allocation? Find out in the latest CIO Monthly video.  

  Key Takeaways  

1. Stalemate?  
   The Multi Asset Boutique believes a stalemate situation is currently the most likely scenario, in which there is ongoing military conflict but the Strait of Hormuz gradually reopens.  
   
   
2. Positive outlook supported  
   The difference between the 1970s oil shock and now is remarkable, as the world is less oil-intensive than it used to be and the US is now one of the largest oil producers.  
   
   
3. Some derisking  
   The Multi Asset Boutique’s Investment Committee closed its overweight in commodities earlier in March and reallocated it to cash.  

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