Markets have seen a relief rally in recent days, as investors price in the endgame of the current Middle East conflict.
The ‘risk-on’ mode has been further bolstered by news of a ceasefire between Israel and Lebanon, and the lifting of a blockade by Iran on commercial vessels in the Strait of Hormuz.
Adding to the general sense of cautious optimism, central bankers attending the IMF meetings in Washington have been talking down the risk of near-term rate hikes.
Markets have reacted to the central bank comments by softening expectations for near term hikes, with less than 50 bps of hikes now priced in by the ECB and 25 bps of hikes by the Bank of England.
