The collapse of US-Iran negotiations and the US threat to blockage Iranian ports presents an escalation in the conflict that the market’s did not anticipate. Equities and bonds are lower, and the is mostly firmer. However, so far, the moves appear restrained. Iranian oil has largely been shipped to China and with the Trump-Xi meeting in a month, the blockade could jeopardize it. Moreover, the risk of escalation is palpable as Iran and its allies could try to close the Bab-el-Mandeb strait, which would be an additional disruption and neutralize the Saudi east-west pipeline that bypasses the Strait of Hormuz.
Hungary’s Orban saw a stunning defeat in the weekend election and the Hungarian forint is the strongest currency in the world today. It is up nearly 2% against the US dollar and around 2.3% against the euro amid speculation that Budapest’s pariah status in Europe will end…
