The biggest story in markets right now: the US-Iran clash around the Strait of Hormuz has turned into a full-blown energy supply shock, and it's reshaping nearly every corner of global macro.
Disruption to the Strait has pulled an estimated 13–20 million barrels per day of oil out of reach, pushing Brent above $110 and sending European gas sharply higher. That single shock is the thread running through everything else today.
Bond markets are repricing fast as investors expect higher inflation. The US 10-year yield touched 4.44% and UK gilt yields hit multi-decade highs. Central banks are being pushed toward tighter stances or delayed cuts — the Fed has effectively dropped near-term cut pricing, the Bank of England faces a classic stagflation squeeze, and a June ECB hike is back on the table in some views.
The geographic split matters. The US, as a net energy exporter, looks relatively insulated, with 2026 GDP still near 2%. The Eurozone is staring at roughly a half-point GDP hit, and the UK has the worst stagflation mix in the G10. India and the Philippines face acute pressure from oil import bills. Australia hiked to 4.35% but signalled a pause.
Views diverge sharply on the Fed: one camp thinks officials will look through the energy spike, another sees renewed hike risk and cuts pushed well into 2026–27. On oil itself, the consensus expects Hormuz to reopen by Q2 2026, but a contrarian view warns inventories could hit crisis levels within weeks.
Worth watching: Friday's US payrolls (consensus slashed to ~60k) and any movement on Hormuz negotiations — the single biggest binary risk for rates, energy, and equities.