Blockade Is Retaliation, Not Escalation, to Pressure Iran
Quick reminder that the blockade is NOT an escalation. Iran has blockaded Western ships for the past 6 weeks. This is payback for that and levels the playing field. The blockade will implode Iran's economy and bring the mullahs to the negotiating table... https://t.co/IXJPYVsuky https://t.co/Ae7BuHDSha
Blockades Are the only Way to Stop Autocratic Aggression
The blockade won't break Iran in a few days. But I'll say this. If the West had blockaded Russia in 2022, Putin wouldn't still be killing innocents in Ukraine. This is the only way to deal with thuggish, resource-rich autocracies:...
Blockade Pressures Iran; Oil Prices Expected Under $120
I've pushed for a blockade for over a month. Now we have it. It's the best way to dismantle the mullahs and get them to the negotiating table in good faith. Key risk to the US is another spike in...
Blockade Cuts Iran's Oil Revenue, Exposes Economic Fragility
A blockade collapses the blue bars below to zero. This collapses Iran's business model, which means there's no money for imports and the red bars go to zero. Iran is a gas station masquerading as an Islamic Republic. Time to...
Saudi Arabia Profits From Oil Surge, Resists Swift Peace
The biggest winner in this war may be Saudi Arabia, which is likely seeing its annual export revenues from oil rise substantially even with lower volumes thanks to the spike in prices. The Saudis have very little incentive to push...
Brent at $95, but US Embargo Could Push $125
My base case is for many weeks of messy negotiations with Iran, but that war has basically ended. That's what I think is priced into Brent at $95. If negotiations fail and the US does an embargo of Iranian oil,...
Turkey Alone Cuts Central Bank Gold; Others Remain Flat
There's endless chatter central banks are selling gold. For the 3 central banks for which we have weekly data (India, Thailand, Turkey), only Turkey has seen gold holdings fall lots (-$20 bn). Gold holdings are flat for the other two....
Turkey Sells $20bn Gold as Lira Faces Depreciation Risk
If negotiations with Iran fail, Turkey will be immediately back in the firing line of global markets. It sold and swapped 128 tons of gold to bolster its FX reserves by around $20 bn in recent weeks, a sign of...
Real Set to Surge Amid US‑Iran Tension
What the Brazilian Real needs to outperform is for Iran and the US to talk, taking catastrophic escalation off the table, but for negotiations to be difficult, which keeps oil prices high. That's exactly where we are and is the...
Gold's 100% Surge Turns It Into Risk Asset
At its peak in January, gold was up 100% y/y. The bubble sucked in lots of new buyers, making gold and other precious metals trade like high-beta risk assets and not safe havens. The debasement trade made gold lose its...
Ceasefire News Drops Oil Futures, Defying Shortage Expectations
There was lots of talk how acute "physical" shortage in the spot market would pull up futures prices of oil. That turned out to be totally wrong. News of a ceasefire pulled down futures, which in turn pulled down spot...
Dollar Poised for Further 5% Decline Amid Widening G10 Gap
The Dollar has a lot further to fall. Look at the gap that's opened up between the Dollar versus the G10 (blue) and the corresponding interest rate differential (black). We're talking about another 5% drop as negotiations continue and war...
Ceasefire Confirmed, US‑Iran Talks Push Dollar Lower
Earlier this week, I predicted we'd get a ceasefire. We did. The US and Iran are negotiating, a big step forward. Lots of details to iron out, but the war is ending, which is hugely risk positive. As a result,...
US Fatigued, Iran Holds Leverage—Ceasefire Likely
Most frequently asked question on this morning's livestream: is a ceasefire even possible? Two things are clear: (i) the US has had enough; (ii) Iran has leverage. How that gets dressed up in face-saving language is what talks are about,...
High Oil Prices Boost Colombian Peso, Brazilian Real
We've now reached the point where commodity exporters in Latin America are up from before the start of the war with Iran. We're getting a ceasefire, but oil prices will stay elevated for a long time. That lifts the ...
Dollar Slides, Commodity Currencies Surge as War Winds Down
We've entered the phase where the Dollar falls hard against EM. This is driven by a mix of markets feeling like the war is winding down and oil prices still very elevated, which boosts commodity exporting countries like Brazil. Real...
Brazil Real Surges as Markets Sense Ukraine De‑escalation
As soon as markets decided Russia's invasion of Ukraine in 2022 wasn't going to lead to WW3, Brazil's Real began rallying hard. It's the same now. The US is clearly eager for a ceasefire and trying to de-escalate. The Brazilian...
Live at 11 Am: Inflation, Ceasefire, Gold Safe Haven
I'm doing my customary weekend livestream today at 11 am because I'm on the road tomorrow. I'll be talking about US inflation, the ceasefire and if it will hold and whether gold is still a safe haven asset. Come join...
US Signals Desire to End Iran War, Messiness Expected
Two things should now be clear to everyone on Iran. First, the US administration clearly wants to end this war. Second, ending this conflict will be messy, which goes for ending pretty much every war. It's the first signal that...
US Inflation Remains Tame Despite Oil Price Spike
How bad is the US inflation picture? The spike in oil prices will push up March CPI later today, but - under the hood - inflation is well behaved. Yesterday's PCE reading for February showed core services inflation (blue) slowing....
US Leverage Forces Israel to End Lebanon War Quickly
The US has major leverage over Israel, so there's no way war in Lebanon continues if it prevents a ceasefire with Iran and a re-opening of the Strait of Hormuz. This war is a big political liability for Republicans and...
Turkey's Central Bank Loses 128 Tons Gold Amid Lira Pressure
The latest data - out today - show gold holdings by Turkey's central bank falling a further 8 tons in the week to April 3. This brings the total drop to 128 tons since depreciation pressure on the Lira peg...
Euro's Debt Charade Leaves Spain, Italy, France Vulnerable
The Euro got hijacked by high-debt countries to foster the illusion they're solvent. But yield caps don't confer fiscal space, which is why - when a shock like Ukraine hits - Spain (ES), Italy (IT) and France (FR) can't help....
Italy's Record Deficit Highlights ECB's Debt‑Shielding Role
Italy's cash budget deficit in Mar '26 is the biggest ever, wider even than Mar '20 at the height of COVID. At the root of this lies the ECB, which is co-opted by high-debt countries and protects them from markets....
Republicans Seek Quick Ceasefire Amid War Liability
There's hardliners on both sides that want to keep fighting and will sabotage the ceasefire. But this war has become a major political liability for Republicans in the midterms and needs to end quickly. This ceasefire will hold because the...
Ceasefire Likely Holds Despite Vested Interests Driving Conflict
Is the ceasefire between the US and Iran going to hold? I expect it will, but there's vested interests on both sides of this conflict that want the fighting to continue. So here's a great piece by @baselinescene in @ProSyn...
Dollar‑EM Indicator Signals Return to 2010‑13 Weakness
It's the Dollar versus EM that's been the key leading indicator for USD direction and that's now tumbling (black). We're in a new regime for the Dollar and are going back to the 2010-2013 period, when Dollar weakness was primarily...
Dollar Set to Tumble, Weakness Through 2026
The Dollar is tumbling as I forecast in my posts predicting a ceasefire. USD will now unwind all its rise from the past month, which was entirely due to short-term safe haven flows that'll now reverse. We're back to Dollar...
Brazilian Real Surges Toward 2022 Fair Value
The Brazilian Real today is strengthening sharply against the Dollar. $/BRL has fallen below where it was on Feb. 27, i.e. before the war with Iran began. The Real will now start a big strengthening cycle. Back to $/BRL fair...
US Pushes Ceasefire End; Spot Oil Set to Drop
There's 2 pushbacks to the ceasefire: (i) it won't hold; (ii) spot oil prices (white) won't fall to futures (orange) soon. No! On (i), the signal is clear: the US wants this over. On (ii), oil tankers from the Gulf...
Oil Forecasts Collapse; Trump Needs War Ended
I spent recent weeks pushing back on $150 or $200 oil price forecasts. Those are now firmly off the table. Brent futures are down sharply and that's right. There's lots of open questions, but the big picture is that Trump...
Ukraine's Drones Aim to Choke Russian Baltic Oil
If Iran can shut down the Strait of Hormuz, why shouldn't Kyiv shut down the Baltic? Kyiv is using drones to hit Russia's two key ports in the Baltic. It spared key infrastructure, but the signal is clear: Ukraine can...
Spot Brent Lags Futures Yet Set to Drop Quickly
It takes an oil tanker between 2 and 4 days to go from the Persian Gulf to India, which is where the most severe shortfall exists. The spot Brent oil price (white) will be slower to fall than the futures...
Dark Shipping Boosts Hormuz Oil Flow to 12 Mb/D
Oil tanker traffic through the Strait of Hormuz is up. You don't see that in publicly available data like these from Bloomberg, because ships now transiting are travelling "dark." I'd say we're now at 12 mb/d out of the Persian...
US Victory Claim Pushes Allies to Guard Hormuz
Declaring "mission accomplished" for the US isn't a climb-down. Instead, it'll force the hand of others who so far are failing to step up to protect the Strait of Hormuz, so it'll bail in Europe and Asia. That's a smart...
UK, Japan, Euro Periphery Lose Fiscal Space
What countries are running out of fiscal space? To see that, you mustn't look at absolute 30-year government bond yields (lhs), as those are up everywhere. Look at 30-year trade-weighted differentials (rhs). The UK, Japan and Euro periphery are in...
War‑driven Gas Prices Could Hit $5 Before Midterms
The US is running on borrowed time in this war. The average price of one gallon of gasoline isn't yet at the $5 it reached in 2022 after Russia's Ukraine invasion, but it's heading there if this war continues. That...
Ceasefire Triggers Oil Drop, Dollar Decline, EM Rally
A ceasefire is coming. Two things will get repriced quickly when that happens. Oil futures will tumble and the Dollar will fall sharply. The latter is up on safe haven inflows to the US. All those inflows will unwind very...
Record Foreign Inflows Defy “Sell America” Rhetoric
One year ago, after the rollout of reciprocal tariffs, "Sell America" was all the rage. But there never was a "Sell America" trade and no "Hedge America" trade either. Foreign inflows into the US are at record highs. Actions speak...
Global Debt, Not Oil, Fuels True Complacency
I keep hearing the word complacency regarding oil prices. Maybe. But the real complacency is in global debt markets. We have an inflationary shock and fiscal policy that - especially in Europe and Japan - is out of control. This...
Forward Yield Spike Signals Looming Global Debt Crisis
The 10-year Treasury yield is 4.3% (blue) and looks benign. But 10y10y forward yield (red) is 5.5% and pushing above pre-2008 levels. The global debt crisis waits for no one. Fiscal policy is out of control and geopolitical uncertainty makes...
Policy Moves, Not Data, Drive Oil, Dollar, Gold Trends
On yesterday's live stream, I discussed which oil prices to watch, why the Dollar failed to rise on Friday's strong payrolls and the large drop in gold holdings of Turkey's central bank, which is entirely a function of the decision...
Gulf Oil Disruption Hits Asian Nations, Fuels Global Price Surge
The bulk of crude oil out of the Persian Gulf - before the war - went to Asia. That dependence is now creating a giant hole, which is what's driving up oil prices globally. Especially hard hit are Pakistan (PK),...
Turkey's Gold Reserves Fall to Defend Lira Peg
There's 3 central banks that publish weekly data on FX reserves and gold holdings: India, Thailand and Turkey. Only Turkey has seen a sustained drop in gold holdings (blue) that have been used to lift FX reserves and defend the...
Live: Oil Prices, Weak Dollar, Central Bank Gold Sales
I'm doing a livestream this morning at 9 am (ET) to talk through: (i) the different oil prices floating around and how they all fit together; (ii) how the Dollar is trading weak, with yesterday's payrolls another example; (iii) central...
War's End Determines Brent Spot vs Futures Direction
This is the spot Brent oil price (white), the Brent March futures that just expired this week (orange), the current Brent June futures (yellow) and WTI (green). If war ends quickly, white converges down to yellow. If war drags on,...
Dollar's Upside Surprise Effect Fades, Weakness Looms
A few months ago, I wrote about how upside data surprises weren't lifting the Dollar anymore. Today is a case in point. Big upside surprise to payrolls and the Dollar does basically nothing. We're seeing regime change for the Dollar...
Surprise US Payrolls Lift Yields, Hit Emerging Markets
The last thing the word needed this morning was strong US data. But that's what we got. A +1.5 standard deviation surprise on payrolls that's pushed up the 2-year yield 5 basis points, which is broadly in line with its...
Europe's Gas Price Surge Makes Hormuz Intervention Urgent
Whatever objections Europe has to helping open up the Strait of Hormuz, it's a matter of urgent self-interest to help sort this situation out. On a similar time scale to 2022 after Russia invaded Ukraine, European natural gas prices are...
Brent Futures Discount Deepens Amid Spot Oil Shortage
The discount on the Brent future expiring in June to the spot Brent oil price is up to 22%. There's acute shortage of oil in the spot market, while futures markets think the war ends soon. This decoupling isn't unprecedented....
