Economic outlook thrown into uncertainty with escalation of war in Iran. Temporary disruption will dent growth and boost inflation, with risk of more prolonged and damaging conflict
US economy more insulated to shocks, with Eurozone and UK exposed to global energy volatility
Central banks held in March and delivered hawkish rhetoric. Market has repriced for higher rates, but central bankers have been sounding more dovish of late, and we expect hold/cuts in near term.
Geopolitics temporarily supporting dollar, but Fed policy, AI and labour markets will return to the fore post conflict
Further modest upsidefor the euro, while sterling could remain on the defensive amid geopolitical uncertainty
