Macro Minutes

In this episode, we examine how the Middle East conflict transmits economic shocks beyond energy markets, focusing on supply chain disruptions in Asia-Pacific and global inflationary pressures. Join us when we explore why commodity exporters like Australia are feeling the pinch, how central banks will respond to stagflation, and why US equities have remained resilient , though caution is warranted as more significant market headwinds may be emerging.
Participants:
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Robert Thompson (Research), Australian Macro Rates Strategist
Izaac Brook (Desk Strategy), US Rates Strategy
Lori Calvasina (Research), Head of U.S. Equity Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The episode examines the Iran conflict through an emerging markets lens, analyzing recent developments and exploring two primary scenarios that could unfold in the coming weeks. The first scenario envisions rapid de-escalation that would allow oil prices to retreat toward $80 per barrel, providing relief to EM economies and supporting risk assets. The second scenario contemplates further escalation, potentially including boots-on-the-ground military intervention, which would keep oil prices elevated for an extended period. This sustained pressure would create headwinds for EM growth, inflation dynamics, and external balances. We assess the implications of each path for emerging market currencies.
Participants:
Luis Estrada(Desk Strategy), LATAM FX Strategist
Daria Parkhomenko (Desk Strategy), FX Strategist
Abbas Keshvani (Desk Strategy), Asia Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this European edition of Macro Minutes, we discuss the rise in energy prices in the wake of the Middle East conflict brings back painful memories of the 2022 energy shock for Europe. We dissect what is similar and what is different, quantify some impacts on inflation and growth estimates, and map a path forward for the ECB and BoE.
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Cathal Kennedy (Desk Strategy), Senior UK Economist
George Moran (Desk Strategy), European Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Concerns over the spending and investment circularity of the AI Ecosystem between chip makers, hyperscalers and data centers has shifted to a New Circularity, driving credit spreads wider. The New Circularity was initiated by new AI apps hitting software equity valuations and credit spreads, which in turn is feeding into concerns over vehicles exposed to that widening, namely the Broadly Syndicated loan market, the Private Credit market, BDCs and even Insurance Companies. Valuation declines have in turn driven redemption requests which has placed more pressure on credit spreads
Participants:
Jason Mandel (Desk Strategy), Head of Leveraged Finance Desk Strategy
Jason Daw (Desk Strategy), Head of North America Rates Strategy
Steven Denny (Desk Strategy), Head of US IG Credit Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The US Tariff framework is changing. China is preparing for its National People’s Congress. Latin America is entering a period of political volatility. We give our take on the current EM environment.
Participants:
Richard Cochinos (Desk Strategy), FX Strategist
Abbas Keshvani (Desk Strategy), Asia Macro Strategist
Daria Parkhomenko (Desk Strategy), FX Strategist
Luis Estrada (Desk Strategy), LATAM FX Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts