债券压力不减，油价下跌难解困局

We were just getting an update on all things to do with the Iran U.S. relationship. We see the oil price a little weaker. Where are we? I think in terms of the markets thinking about war in the Middle East, about developments in the Middle East, and the role that the oil price plays because it has been instrumental to the bond market story in in recent months. But I wonder how prominent it's going to be from here. So the two different time spans to answer that question, I think in the short term, where are we in terms of pricing?

I think the market has a lot of cynicism about the deal, and that means that piece is not fully priced, which means if it doesn't break down, it can continue to be an extended kind of small tailwind of support. Uh, so I think that that that's an important to emphasize that it's it's not fully priced, that we're going to have some kind of, you know, continue going towards peace, that the breakdown possibility is there.

On a bigger picture thing, where do we stand? Ready oil? I think probably one of the biggest developments of 2026 is that oil has gone from being perceived as one of the most important macro, uh, assets, inputs in the world to people realizing that it's a lot less important than Then maybe they thought, I think that that is a game changer for the kind of the macro guide book. It is no longer, uh, as influential in pricing, uh, every asset around the world.

And I think that's partially in terms of the electrification that are going, but also that just that the massive supply of fossil fuels that we do have around the world. Um, what does that mean for the bull market? Bull market is really interesting right now. Yields are just going up. And despite the fact that all is going down, is that part of that same narrative you're talking about? Yeah. It is. I mean, the fact is, is that we are seeing that kind of that break away between, you know, we've had this complete collapse in oil prices over the last couple of weeks.

And yet bond yields have stayed sticky at high levels. Uh, and in fact, it started drifting higher again over the past week. And I think that is that that disconnect that, hey, it's not all about oil prices. Yes, oil prices matter. Um, but they're not the be all and end all. Uh, I do think that the backdrop for bonds remains difficult after that hawkish FOMC last week. Uh, and I think that given that oil prices have already come down a long way, there is more of an asymmetric risk of another spike up here.

If there is a complete negotiation, break down the Middle East. Then there is in oil prices going much lower. So I think you know that that implies that even though that oil is not the only driver of bonds, it still matters at the at the margin. And therefore, if we do get another spike in prices, that could see yields jump again as well. Mark, if we get Starmer out, do we get further upside on UK yields, further downside pressure on gilts.

I think the headline is probably yes but I don't think it last. I think this has been the most telegraphed, uh, you know leadership change in the UK probably since the last one in the UK. They always seem quite predictable at the time. Um, so this isn't like, you know, this isn't going to be treated as a shock for the markets. We're all just, like, waiting to find out the timing, that it seems inevitable that we are going to get that change of leadership.

So to me, I don't think we get much more downside in the short term. And I think the fact that, in fact, that the replacement of Starmer with Burnham seems to be progressing in that direction very seamlessly. Uh, means that Andy Burnham doesn't have to go further to the left, and that should ultimately be a slight bit of relief to the market. But yes, they'll trade this a long term negative. The long term leadership turmoil in the UK.