Macro Insights Weekly - Cost of the Iran War

Iran deal hopes may calm markets briefly, but war-driven energy, shipping, and defence costs will keep inflation and fiscal pressures high, sustaining bond market stress and favouring short-duration bonds
An imminent deal may help sentiment, but war costs will continue to build
Energy infrastructure damage to keep oil and gas costs elevated for longer
Strait of Hormuz risk raises shipping volatility and energy premiums
Higher defence spending adds to already stretched public finances
Rising yields and refinancing risks favour short-duration bond strategies