“A man hears what he wants to hear and disregards the rest.” Paul Simon
KEY THEMES
The Iran conflict escalated sharply over the weekend as US-Iran peace talks collapsed and President Donald Trump ordered a blockade of the Strait of Hormuz . Oil surged back above $100 a barrel following the weekend’s deadlock , while European natural gas prices jumped as much as 18% during Asian trading hours .
The geopolitical shock is forcing a systematic repricing across asset classes—the dollar strengthened despite diverging rate expectations, and Bitcoin slipped below $71,000, abandoning any safe-haven narrative .
JPMorgan strategists argue investors should use the geopolitics-driven weakness to buy the dip, noting equities have historically proved resilient to oil shocks .
MARKET SNAPSHOT
US stock futures pointed lower in premarket trading, with the S&P 500 and Nasdaq down 0.6% each and the Dow off 0.5% .
The Hungarian forint surged as much as 2.8% to a four-year high after the opposition Tisza party secured a landslide election victory to oust Prime Minister Viktor Orban . Emerging-market currencies came under pressure, with the South African rand declining 0.7% to 16.54 per dollar and yields on 10-year government debt rising 11 basis points to around 8.67% .
Goldman Sachs shares slumped in premarket trading after the bank reported a 17.6% miss on FICC revenue, though equity trading beat estimates by 8.7% . Reaction to GS earnings framing to tone for financials earnings season-basically inline is not being taken as good enough, as caution about outlook continues to shadow the group, compounded by recent rally in the sector
MACRO
The US military said it would implement a blockade of all maritime traffic entering and exiting Iranian ports at 10 a.m. Washington time on Monday . Traffic through the Strait of Hormuz appeared to have come to a halt.
Vance warned that Washington had made Tehran its “final and best offer” for a deal . Trump and his advisers are looking at resuming limited military strikes in Iran in addition to the blockade as a way to break the stalemate, according to officials and people familiar with the situation . Trump could also resume a full-fledged bombing campaign, though officials said this was among the options being considered .
The blockade threatens to deepen an already unprecedented crisis in one of the world’s most important energy-producing regions. Deutsche Bank pointed to the oil price rise and said: “That’s revived fears about a stagflationary shock, with equities and bonds both under pressure” . Fitch Ratings warned that Saudi Arabian banks’ asset quality, profitability and liquidity could come under pressure if the Iran conflict is more prolonged or severe than expected, potentially leading to Viability Rating downgrades for some banks . The IMF director said the shock from the US-Iran war is already “baked” into the economy
OPEC crude oil production plunged in March by 7.89 million barrels a day to 20.79 million barrels a day as the near-closure of the Strait of Hormuz forced key members to curb output.
Bank of Japan Governor Kazuo Ueda warned that Japan could face upward pressure on prices more easily than in the past, suggesting an interest-rate increase remains on the table.
Investors are writing off any move from the Fed this month, as collapsing talks in Iran have sealed expectations that rates will remain on hold. Economist Mark Zandi warned that the US economy is showing signs of growing fragility, as weakening consumer spending and rising geopolitical tensions increase pressure on the outlook.
DOMESTIC
Viktor Orban’s election defeat in Hungary has significant reverberations in the United States, as President Trump and many US conservatives have long embraced Orban, who has become an icon of the American right . The election loss for the Hungarian Prime Minister has ripple effects for Trump and US conservatives .
Trump attacked Pope Leo XIV for his criticisms of the US-Israeli war on Iran, calling the leader of the Catholic Church “WEAK on crime” . The American-born pope has issued a series of rebukes to Trump’s leadership, most recently challenging the administration’s argument that God is on the side of the US in the conflict with Iran . Trump said in a social media post: “I don’t want a Pope who thinks it’s OK for Iran to have a Nuclear Weapon” . He also posted a picture depicting himself as Jesus healing the sick on Truth Social
Congressional activity: Republicans return to Washington this week with reconciliation on the brain, as the partisan spending process is their best hope for funding immigration enforcement agencies to finally end the record-long Department of Homeland Security shutdown . Leadership still needs to get all House Republicans on board, and the House Freedom Caucus remains skeptical .
COMMODITIES
Brent crude rallied as much as 9.1% to near $104 a barrel, while European gas futures spiked almost 18% .
European natural gas benchmark futures jumped during Asian trading hours before paring some gains as European market participants came online.
Gold edged down as much as 2.2% to trade below $4,650 an ounce amid mounting inflation concerns . Spot silver remained under pressure near $74 levels.
Asian refiners are contemplating 20-30% run-rate cuts and accelerated maintenance schedules as dozens of crude tankers remain stranded in the Persian Gulf.
Saudi Arabia restored full capacity of its East-West pipeline, bringing pumping capacity back to 7 million barrels per day after last week's attacks reduced it by 700,000 barrels per day.
FLOWS AND POSITIONING
The Bloomberg Dollar Spot Index rose 0.3% after President Trump ordered a blockade of the Strait of Hormuz.
The dollar strengthened across most emerging-market peers despite diverging monetary-policy expectations, with the Federal Reserve comfortable leaving rates on hold while markets expect the Bank of England and European Central Bank to raise rates.
Crypto investment products attracted $1.1 billion in inflows last week, the strongest showing since early January, attributed to lower-than-expected US inflation data and calmer geopolitical conditions prior to the weekend breakdown.
Bitcoin slipped below $71,000 as blockchain analytics firm Glassnode reports traders are selling more than $20 million worth of Bitcoin per hour to lock in profits .AI Disruption & Tech Themes
Artificial Intelligence could trigger a stock market upheaval on a scale bigger than the global financial crisis, Muddy Waters founder Carson Block told the Financial Times . Rapid adoption of AI would cause economic and market disruption over the next few years, as job dislocation feeds through to government finances and financial stability . “Over the medium term, there’s going to be severe economic consequences, market consequences, government financial” impacts, Block said .
Three distinct camps are forming around AI: power users, doubters and resisters . The disconnect is showing up everywhere — from job-loss fears to data center protests to actual violence . Doubters still see AI as glitchy chatbots and viral fails and aren’t using its full capabilities .
Enterprise AI is shifting from chatbots to autonomous agents, according to Box CEO Aaron Levie . After meeting with IT and AI leaders across banking, media, and retail, Levie wrote that enterprise artificial intelligence is moving beyond chatbots toward autonomous agents that can execute real work inside large organizations .
AI infrastructure and adoption developments:
Computing power crunch: The AI gold rush is rapidly drying up the supply of computing power, causing consternation among power users, forcing companies to scuttle products and leading to reliability problems . The sharp capacity crunch is a warning sign for the AI boom, as it may limit the utility of powerful new AI tools just as massive amounts of users have begun to rely on them .
Enterprise adoption accelerating: More than 80% of industrial technology companies have already adopted AI at least to some extent, up from 69% the year before, according to the 2026 TE Connectivity Industrial Technology Index .
Saudi Arabia’s First Mills became the inaugural customer of Glasgow-based AI startup Kodamai, deploying what the company describes as the world’s first mathematically verified autonomous agent platform across its four production facilities .
Software sector under pressure: Shares of software companies fell on April 10, extending recent weakness as investors continue to fret about disruption from powerful new AI models . The iShares Expanded Tech-Software Sector ETF dropped 2.6%, and it has fallen more than 7% over the past three trading days .
OpenAI released a 13-page document seeking to lay down a marker for the kinds of policy shifts that might help AI advances create broad prosperity, rather than a divided society with a handful of AI-turbocharged elites and a mass underclass . The company proposes that governments should incentivize a widespread four-day work week, according to CEO Sam Altman .
AI-led deals are being priced at a premium even as client confidence shows signs of recovery, Tata Consultancy Services CEO K Krithivasan said, indicating that demand for technology modernization anchored in artificial intelligence is strengthening across sectors .
From my Friend PauloMacro:
‘The North Star vs. Liquidity:Revisiting Nash During the ‘Ceasefire’’‘The War the Arab World Is Watching: The Middle East Has a Different Story and the West Is Not Hearing It’~zineb ribouaFrom the inimitable Le Shrub:
‘The Next Big Trade? - Part II (Reminiscences of a Shrub operator)
The latest report showed a 53% jump in gross USD longs versus eight IMM futures to $17.5 billion - a 14-month high - up from a $19 billion short just before the Middle East conflict began, highlighting a sharp shift into the most liquid safe-haven asset. This buying occurred despite a small net loss in the dollar on the week, with that weakness accelerating following the Iran–US ceasefire announcement.
Disclaimer: Opinions are mine alone and may change. It does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security, loan or asset or to participate in any trading strategy. It is not intended to form the basis of any investment decision, should not be considered a recommendation, and does not constitute an offer or solicitation with respect to the purchase or sale of any investment, nor is it a confirmation of such terms.
Disclaimer: Opinions are mine alone and may change. It does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security, loan or asset or to participate in any trading strategy. It is not intended to form the basis of any investment decision, should not be considered a recommendation, and does not constitute an offer or solicitation with respect to the purchase or sale of any investment, nor is it a confirmation of such terms.
