Market Relief After US-Iran Ceasefire Before Trump Deadline | The Opening Trade 4/8/2026

Good morning. It's Wednesday, April the eighth. This is what is on the markets radar. A two week cease fire and risk assets surge. But is the Straits of Hormuz really open? And what longer term risk premium should attach to Middle East assets? Let's talk a little bit about where we are with these markets.

You get into the office this morning. You look at the screen. Just take a moment to enjoy it because the question is, do you where do we go from here? Brent crude is down by 14%. Euro Stoxx 50 is down by a sorry is up by 5%. Euro dollar is up by 8/10 of a percent. You do not see these kinds of moves very often. The question I think a lot of trade is going to be asking themselves this morning is do I go with this or do I fade this? And I think that's the question that I think we need to debate over the next couple of hours. The countdown to the opening trade starts right now. Welcome to the program, everybody. 7:01 here in London on Wednesday, the 8th of April. And it looks set to be a monumental session, a gymnastics session ahead. Certainly some big moves priced in at the start of the European equity session. So just as you said, guy, let's take a moment to reflect on the moves that we are seeing already in markets and about to see through the European session before we poured cold water on some of it and ask a lot of questions about where things go next.

But just in the very near term, we've got oil dropping the most in some six weeks. That takes us down to the we were around the middle of March and some some of the moves in the Treasury market. Incredible. Also two year yields coming down to where they were beginning middle of March. So that's important. Asia stocks down at a three week high as a result of this. I'm futures for Europe pointing up by 5% more than 2% over in the United States. These are set to be some staggering moves at the start of trade.

Okay. So let's look at the last six weeks since the 28th, since the war started. There's only one sector in Europe in positive territory. That's the energy sector. Do you sell that this morning? How hard do you sell that this morning? Does that mean that the FTSE 100 gets impacted and hit hard on the back of that? So it looks like it's going to be higher. Luxury has been the hardest hit. That looks like an area that could rebound this morning. You've got real estate. You've got all kinds of other sectors that have been beaten up. Banks are going to be a critical one. I was talking to Neal Camping about this on our markets. That's what happens there. Do you believe the right story? Do they come down with oil starting to move on the back of that? So I think some really interesting nuance here. But but if you're a skeptical trader coming in this morning and you see the kind of moves that we're seeing this morning, is your first instinct to say, actually this is overdone, is this something that will fade? Do I believe what's happening on the ground will stick? Yeah, absolutely. And just as a just as a reminder of the scale of the moves, natural gas prices coming down in Europe by 18%, you don't see this very often. And so so these are incredible moves. And somebody will have been positioned for this. Somebody will. But it's interesting. We'll talk about some of the hedge funds in a minute. The leverage hedge funds have lost money. Some of them will have been positioned for this. I somebody is making money somewhere. I don't know how whether or not that is going to kind of compensate for losses. I just you don't know where positioning is right now, but you do know that it's all over the place. But what do you what do you do this morning? I mean, do you start with the markets and think about the geopolitics? Do you start with the geopolitics and then think about the market reaction to I don't know that there's going to be a period, I think towards the end of this week where the market goes into another difficult weekend. Yeah, not knowing enough. Yes, exactly. And there are so many things we don't know.

Let's start with what we don't know about the Straits of Hormuz. I mean, is it what defines it as open is going to be one of the things that we're going to be talking about over the next few days. President Trump has said it's going to be it's got to be a complete and immediate reopening. Iran has said that that that they will be open, but in coordination with Iran's armed forces, are they going to be charging for access? The Iranians in the and Omanis have been working on a project that looks like that. What kind of a concession is this to Iran? And meanwhile, hundreds of ships are stuck still inside trying to get out. And we'll be tracking those as they try and make a move. It's a great function to play that you can do that with. I think it takes roughly a week. It's five days. It's call it for a for a vlcc to get into the Gulf and out of the Gulf fully loaded. But I'm assuming that that is a process that is going to take longer this time round simply because of the volume of traffic that is that is going in and out of the Gulf. So you've got a two week period. How much of what is in there now could get out? Yeah. And how much of what is sitting outside can get back in again and reload and start to get things back to normal. So how long does that process last for? And if it takes a while, do you just assume the oil prices are going to be higher? Is insurance going to be higher or the ship is going to have to pay a higher cost as a result of this? As you say, we just we don't know is there are too many in charge on every single ship that goes in and out? I don't know. I think I mean, what we're showing here, this map function on the Bloomberg terminal where you can see the real time, the number of ships that are clustered around the Strait of Hormuz, around that peninsula, trying to get into the Persian Gulf, trying to get out of the Persian Gulf. And you raise an important point, which is about all of the various players, because when we've been tracking the way that they shut down traffic through the Strait of Hormuz, it became very clear that it wasn't just a question of insurance. You know, could you get insurance? Well, often you can get things for a price, but the prices were astronomical. But also it was about the owners, whether they would actually send their assets through that, the cruise, whether the captains would actually go through. And all of these questions are going to still be being asked. I think it is interesting if the Iranians are opening things up through the Strait of Hormuz, what do we conclude about where or if there are any mines in the Persian Gulf? Because and who has full understanding of all of that? Because that will be on the minds of these the shipping industry. Why would the Iranians give up what appears to be their biggest assets? Coming out of this conflict. We have control of the strait. Why would you completely give that up? So assuming there's going to have to be a caveat that comes with that, that the Iranians are going to try and impose over the longer term, which takes us on to the longer term question What do you do with oil prices now? Do you look at them and go, We were at 60. But the long term average over the last five years is something like 75. Do I do I put 0 on that now? Do I put $20 on that? So if you have put $20 on that, so you get to 70, 75, 80. What does that do to the global economy? What's the longer term picture here in terms of what this does to the growth story and the inflation narrative?

Yeah, absolutely. And even if we take an optimistic view and we say there will be no more fighting here, what kind of scarring has already happened to the infrastructure that's in place in the Middle East? And what does that mean for the elevated nature of oil prices, for the ability of that energy to get out of the Persian Gulf? That's just one question. I mean, when all of this happens, when the the cease fire is in place, we'll get a report on the ground later on in this hour, Guy. But we've seen attacks actually being caught, being reported from Saudi Arabia, from Bahrain, even since the cease fire was announced. So even there, we don't have clarity. What exactly is Israel intending? Mixed signals around Lebanon. They don't seem to think that Lebanon is involved. And then we come to further talks at the weekend, probably hosted by Pakistan. And what should our expectations be that President Trump has talked about a ten point plan from the Iranians? Lots of the things on that previous ten point plan do not look tolerable to too many in the US. But let's assume that Trump, President Trump does not want to go back. He clearly is not wants he will not want to go back into the intensity of the period we've just had and the risk that represents to him politically gas prices, whatever it is, the economic story, he's not going to want to go there. So what will he tolerate to not go back there, I think is an ancient question. And and Wilkie tolerates a more restricted Strait of Hormuz because he says he doesn't rely on that. If the rest of the world has to pay the price. Yeah. Yes, exactly. And who will he say? She needs to work with the Iranians to arrange that shipping through the Strait of Hormuz. Maybe there's a role there for other global players. And we've seen the British trying to start some of these conversations with 40 countries around the world. Heavy Hamburg's is going to be here shortly. We'll talk about gold with him. He's going to be joining us from BlackRock. Henry Allen, Deutsche Bank macro strategist, will be here at. Let's call it circa 8:00 just after the market opened. That's down in Vakil. Chatham House is going to be joining us a little bit later on as well. We'll talk the geopolitics. We'll talk to the questions that Anas just raised about what happens next. What do these weekend talks look like? What do we know about the various plans that are now being put forward and whether or not they will stick?

From a market perspective, there are some data points on the docket today, not perhaps the high level, but euro area retail sales. We get that from an earnings perspective. Maybe Delta Airlines really interesting to watch for and that comes before market over in the US. Just to get a flavor of how the oil industry, the aviation industry is dealing with their oil drama right now. Mary Daly will be speaking. We've heard a lot from the Fed of late, but everybody in the dark at everybody lacking conviction was the last meeting at the last Fed meeting narrative. And we'll get the minutes from that a little bit later on today. Yep, we will be looking forward to that.

What else do we need to know this morning? Bloomberg understands that Apple's first foldable phone is on track and will arrive during the company's normal iPhone launch period, which comes a little later on this year. Sources say the company is scheduled to introduce the foldable model in September. It's likely to come alongside the iPhone 18, pro and pro max. The device is a major initiative for Apple, which is seeking to expand the iPhone line with new designs, pricier models, of course, and enhanced features. Moody's has cut the outlook on the flagship front of the private credit giant Blue Owl Capital to negative the rating firm over the outlook on blue. Our credit income corp from stable after significantly higher than peer redemption requests in the first quarter to .8 trillion private credit industry is facing an investor exodus amid concerns over lax lending standards and a failure to clearly explain liquidity restrictions.

Back to the story we were just talking about. Macro hedge funds struggled in March as the war in the Middle East upended inflation expectations, leading to steep losses of many of the industry's largest firms, sources say say titans of Jupiter Fund lost around 12% in March. I believe that understands the Brethren. Howard's master fund fell 6.6 for the worst monthly loss in its two decade plus history. These are clearly they've been caught off guard. Clearly, they expected inflation to come down, but these are these are highly leveraged funds. Yeah. That are that are making big aggressive positions. So the market needs X, they're going to move X plus if they get it wrong. Yes, they can. But if the market then reverses the other way, they can also reverse some of those losses. Yes. And I wonder if they've all been caught out by the same thing or different things. But, you know, these are funds making big calls around interest rates, inflation, geopolitics. I wonder if the fact that the midterms are looming had some off guard, I don't know. But this was definitely a theme of one of the events I was at just before this war, two weeks before this war started, where a lot of people were convinced that this won't happen in the Middle East just because the midterms are coming there on the calendar. President Trump won't take that risk. And I just wonder whether there were others caught out by that. Clearly, these guys were caught out and and the leverage they run will make big calls out really hard. Yeah. And a. If they they're caught out in the bond markets as well, because there were lots of questions about what kind of role will bond markets play. Will they focus on inflation? Will they be that haven asset thinking about growth and it turns out to be the former. Yep. For a lot a lot of the time since the end of February. That is setting the agenda.

Coming up on the program, I also Director-General Willie Walsh sees the two week Iran ceasefire as positive for the aviation industry, but says jet fuel and ticket prices will remain elevated. We will watch how European airlines fare at the market open. Last New York Fed President John Williams says he expects little change to underlying inflation due to the energy shot from the Iran war. We'll bring you some of that exclusive interview. Up next, we will be hearing from King Clemons, who is head of strategy at Panmure Libera. We will get into a conversation there about where we are in these markets now and what we should expect over the days and weeks to come. If you have questions, please get involved in these conversations. We do like to hear from you either. Plus, VTV go is the function on this very sunny day in London. This is back. Welcome back. This is the opening trade, 15 minutes from seven here in London on what sets to be a day of really strong gains at the start of the trading session. Here in Europe, you are sold 50 features, then up by 5.3%. Let's return to our top story. And that is, of course, the fact that the US and Iran have agreed to a two week cease fire, sending oil prices lower and lifting global stocks. It is a temporary reprieve, 40 weeks for the region, buying time for the two sides to reach a longer term agreement, perhaps hopefully to end the war. For more, let's bring in Bloomberg Rising Zynga, Jomana Persichilli, who is in Dubai for us. So remind us what we do know, Jamal, and we've just been through a host of questions about what we don't know. Remind us where we've got to. What has been the tier? But we have a cease fire, which is a dramatic turn of events from where we were about 12 hours ago. And it's worth pointing out that President Trump put up that truce social post about 90 minutes before that deadline and that threat to follow through on the full destruction of Iran's civilian infrastructure, their power plants and bridges if they did not yield to the US demands. So 90 minutes before that deadline, they announced the two week cease fire. That was also echoed by comments from the Iranian Foreign minister, Abbas Araqchi, who said in a statement that for a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran's armed forces, will come back to that point in just a moment. And then later on, a couple of hours later, it took 4 hours. But the Israeli prime minister as well, Benjamin Netanyahu, said that Israel are supporting us, a cease fire with Iran, but that it would not necessarily apply to Hezbollah. So an important caveat there. And we also know that the key mediator, Pakistan, their prime minister, has invited all relevant parties to Islamabad for an in-person meeting to take place later this week. Unclear at this point who exactly will be attending, though. There are many reports overnight suggesting that the vice president, that was J.D. Vance, who really helped get this deal over the line. President Trump earlier this morning speaking to AFP, suggesting that China also played a role in getting Iran to the negotiating table. Now, where things stand right now, all sides seem to be painting this as a victory. Trump said earlier this is a total and complete victory for the U.S. But at the same time, Iran overnight had presented their list of ten demands of what they would like to see. And some of those terms are extremely maximalist still, including the removal of U.S. bases from the region. They want to maintain sovereignty over the Strait of Hormuz. They want Israel to cease operations against their other proxies in the region. And of course, we've heard from the Israeli prime minister that for them is not a nonstarter. So there's still a lot of daylight between the two sides. But at least for now, as you say, we've walked back from the brink and no immediate concerns about an escalation over the next two weeks.

Do you want to just briefly talk to me through what happens next in the Strait of Hormuz? Yeah. So this is a major point and worth reminding everybody that the wording with the Iranian foreign minister's post suggests that Iran will agree to the opening of the Strait so long as there is coordination with Iran's armed forces there, suggesting some oversight still over which vessels get to pass through the straits overnight. Associated Press reporting that there may be a joint system, a toll structure set up between Iran and Oman. Unclear if that's going to go ahead. But what they are asserting is their right of sovereignty over who gets to pass through. And remember, there are 800 vessels still sitting in the Persian Gulf awaiting that transit. Unclear at this point if they're going to go through. So we're going to monitor in the next few days. Very carefully. Jomana, thanks for the update. Really appreciate it. Jomana essentially joining us out of Dubai. Joe Clements here, managing director and research analyst of Strategy and Economics of Panmure Livre. Good morning. Good morning. A really good morning. Very good morning. Fantastic morning. If you along some of these assets. Do you believe this move? Do you find this move? What do you do with this move? You're sitting down at your desk. European. Morning. What do you do? Well, I mean, I've been speaking to so many fund managers and PMS over the last month, and they've all been basically reduced to an investment horizon of 24 hours or less, namely the next Trumps to a social tweet. Now, they've become real long term investors, and Ben Graham would be proud of them because now we can look forward to weeks. But in truth, you don't really trust this cease fire just yet. First of all, as we just heard, there's still a wide, wide gap between the demands of both Iran and the US. And then the other thing is we don't know what's coming after two weeks. All we know is that we're trying to get as much oil, LNG, helium, fertilizers, etc. out of the Persian Gulf in the next two weeks, no matter what, in order to reduce the shortages that are threatening the US and Asian and European and Asian economies. Am I still watching the oil price really carefully? Is that my key barometer in terms of telling me which way the weather is going to change If it goes down, I could see that I buy more Europe and maybe less something else going to happen. What do I use as my North Star right now to understand which direction we're travelling in? Yeah, the oil price is definitely going to be centre of the attention over the next two weeks, but I think the other more important and more interesting thing to look at is where do bond yields go? Bond yields have moved incredibly high, especially in Europe, as markets have priced in rate hikes by the Bank of England, the ECB and other European central banks. And I think with this relief rally, we will see some of those rate hikes being priced out again, lifting some of those stocks that are more yield sensitive. Hmm. Good morning, Joe. And that takes me nicely on to what I was just obsessing with. And that is where European bond markets going to open up this morning. We have incredible moves on the Italian beat PS 34 basis points lower on ten years. These are these are really big moves. I mean, your thoughts on the scale of that, whether that seems proportionate to what we're seeing? Well, that that was quite shocking to hear just now because that number before. But to be perfectly honest, I would have expected a massive, massive move in bond yields this morning as a relief rally. 35 basis points indicates to me that we're pricing out several of the two rate hikes that the ECB has been priced in over the last month. I'm still in the camp where I think the ECB will not hike interest rates at all. But if that goes out in all in one day, then I would say that's that's a pretty aggressive move in one day and a bit too much in the other direction. Yes. I mean, we saw opportunities in some of these rate sensitive sectors even before we got these news of this ceasefire. I didn't You thought the market was pricing in too aggressively rate hikes. We wouldn't get all of those. So. So, yes, you don't think we should get those rate hikes now? So what kind of opportunities in the likes of real estate utilities? And these are some of the sectors we're going to watch 8:00 this morning. Absolutely. And we already see in the pre market trade that some of these stocks are trading substantially higher. I do think and to me, the key variable here is the real bond yields are less so than than the inflation break even rates. And when we look at real bond yields in the eurozone, they have reached the highs of the post 2223 inflation shocks in the last couple of days. So it's a really good opportunity to invest into these yield sensitive sectors. Utilities have the distinct advantage that they also benefit from consistently higher natural gas and oil prices, as electricity prices will likely remain high for the remainder of the year. Because remember that even though we are now opening up the Strait of Hormuz for two weeks, a lot of the infrastructure remains destroyed and the supply overhang that we had the beginning of the year, we no longer have that. So oil and energy prices in general will remain elevated for the rest of this year, and that is really good for utilities. Is that an inflation shock or a gross shock? I would be debating this for the last few weeks as to whether or not we need to worry about one or the other. The implication seems to be that we take inflation off the table one after the other. Yeah, yeah. That's what we were discussing yesterday. I think our inflation models indicate that yes, it is an inflation shock and a growth shock both. Right. But the inflation shock is so subdued, it's about a half a percentage point to one percentage point. And it really is transitory if we are staying in this environment where the Strait of Hormuz kind of normalizes and oil and gas prices remain at current levels and I mean current levels as of yesterday. 10 per barrel. Per barrel of crude oil. Then the central banks have a really good case of looking through and focusing more on the growth impact, which is arguably more longer lasting. And that gives them the opportunity to say, okay, we're not concerned about the inflation shock, we're not going to hike interest rates and add to the growth worries. We focus more on the growth worries and that means staying put potentially in the second half of this year, even a cut. So is this just a generally higher inflation world that we enter into in the medium term with the US, a slightly less predictable actor at some globalization trends already in question as a result of this and other and other activities and the higher risk premium we have to attach to energy coming out of the Middle East, is this just all broadly inflationary? Oh, yes, absolutely. I think I use I like to say freest and You tube, when it comes to long term inflation rates and the reasons are actually manifold. It isn't just the current events in the Middle East and the higher risk premium around the energy supply. But it is also demographic trends in Europe that lead to an ageing population. And let's not forget that a year ago we were sitting here and talking about Liberation Day and the globalization effect. And globalization has done one thing over the last 20, 30 years, and that has been a consistent disinflationary impact on a lot of imported goods. And that's falling away. We've done all this. A lot of analysts will just want to be looking at their numbers in terms of what this means for for earnings. What does this mean for earnings? We're starting through the earnings season now. What does this earnings season look like? Do we wait for the next earnings season before we start to see the impact? What if you're worried about growth? Are earnings estimates too high? They are. We think that across Europe and in the US they are too high in Europe. We do think that they're still single digit positive earnings growth possible this year, but the close to 10% that are currently priced into the market is too high. There has been a significant sentiment shock over the last month. You see that in the PMI's everywhere. You also see it if you go below the headlines in the new order intake, which has kind of fallen off a cliff. And the next step will be the employment situation that is going to worsen. So earnings growth, I think in the middle of mid-single digits in Europe is possible. In the US, 10 to 12% is definitely possible, which is, mind you, about half of what the market price is in at the moment. Joe, thank you very much. Thanks for your time this morning. Joe Clement, managing director and research analyst of strategy and economics at From Your Living Room. Thank you very much for rolling with the market moves this morning.

Coming up, gold and copper jump on the back of that cease fire deal between the US and Iran, Just some of the assets we're watching and a timely conversation then with you. Hambro from BlackRock will be with us shortly. This is Glenn back. 30 minutes to go until the opening trade here in Europe. Futures are unbelievably positive right now. And I say unbelievably, they are believably positive. They are very positive. You can look at the screen in front of you and see what is happening. The stock 50 futures are up over 5%. So he's got a load of energy assets in it. Does it mean does that therefore underperform? The CAC is up by 4%, The DAX is having a very good session, spawning very energy dependent on the other side of the trade, the German economy. So you're kind of seeing what you'd expect, but the magnitude of the moves are enormous. In equities. They're even bigger, you could argue, in the bond market. Yeah, absolutely amazing. From equities on the equities front will certainly keep an eye on anything that is bond market related, that is influenced by by bond markets, which is, you know, at the end of the day, most things we're watching European bond markets open up this morning then. And the drop in yields is is quite staggering, certainly on Italian BTP, which of course often move around more than the rest. They are down 32 basis points at the ten year. I'm sticking to the ten year because the moves are big enough there and the on the French the French equities down 25 basis points, the Germans down 18 basis points. I will point out for comparison, you know, we were up ten basis points just in yesterday's session. Yeah. So these are incredible moves and this is one of the features of the last few weeks. It's just been outsized moves in bond markets and people been caught a little off guard. Is the market looking too far away? Does it come back to you, fade the moves you're seeing on the screens this morning? I think a lot of managers will be sitting down trying to figure that that question out this morning. It's intriguing to see what is happening in metals as well. You see, again, a lot of turbulence in this space. Energy assets have been the focus, but metals have been a huge focus as well over the last few weeks. Let's get an update on that. Gold and copper gaining this morning after President Donald Trump and Iran agreed to a two week cease fire to finalize talks on ending the war that's upended markets. Let's bring into the conversation Avi Hammer, global head of thematic and sector investing over at BlackRock. Evy, really nice to have you with us this morning. Let's focus on gold certainly to start with because we feel like we've learnt a lot over January, February, March. Lots of different things about what is good for gold prices and what isn't and how gold should perform. What message do I take away from the fact that gold is back to gains this morning up by 2.6%? Yeah, I mean, I think what we've what we've seen is coming into this conflict and there were incredibly strong fundamentals across a variety of different parts of the global economy. And the conflict has obviously dominated for the last several, several weeks. And so what we've been thinking about is, you know, if that was to disappear, what would the headlines be written about? Would it go back to where we have come from or would there be some legacy impact from the conflict that would last for a period of time, three, six, nine, 12 months into the future? And trying not to lose sight of those fundamentals has been absolutely core. So kind of staying invested for us has been a kind of key, key thing to focus on. With regards to your question on gold specifically, you know, we were when we went into this, there was a commodities bet that had been building for the last few years. We'd seen the commodity moves. People were kind of thinking about commodities for portfolios. Again, it wasn't becoming mainstream, it wasn't consensus, but there was definitely a baton. And in our kind of analysis, that bet didn't contain energy. And so when the conflict arose, there was a kind of reallocation within the commodity sleeve towards more of an energy weighting into oil and gas. And obviously things that were in there were taken up, were taken out, and that's what caused the selling in the short term. Okay. So we don't draw the conclusion that gold is no longer a haven and is a liquidity play. You think that this was to do with the fact that gold had already rallied so far? Jan, January, February because of other matters and there was a lot of money then just decided to go back to energy and sets rotates into energy. I think there was a rotation within the kind of commodities sleeve that people might have had in their portfolios, but when you look back at the fundamentals or, you know, what is the outcome of this conflict, you know, our governments now have they know what, less debt, you know, are they spending less? Have they sorted out the problems that they had prior to this? None of it. It's actually got worse. You know, there's now more spending on defense and probably more spending on energy resilience, energy independence, things that probably weren't as much on the agenda as they as they probably are now. So I actually think that the level of spending of government is going to go up. I mean, we had that incredible statistic. Was it last week? I think where we had less coming in to the UK government from income tax that was going out in welfare, you know, for the first time ever and an extraordinary number. So the problems in government around the world are very, very extreme and only likely to get worse. Gold is going to be a major beneficiary of that. It has been and it will continue to be. So two questions come out of this, the under allocation to energy. I'm assuming that doesn't go back to being where it was. So are these funds going to be more allocated towards energy because they now see the risks, the longer term risks within the Persian Gulf and as a result of which maybe they hope more energy and less gold? Hmm. Yeah, I think we've you know, we touched on this before and previous things. I think that the when you look at the the relevance of the commodities space to the global economy and its irrelevance in terms of enterprise value or market cap, know there's a big gap there. You know, there's they're very, very underweighted in terms of sectors financially yet but they're so core to the global economy. And I think this has been a bit of a wake up call. People say actually, you know, we need to think about this and, you know, do energy prices go back or commodity energy commodity prices go back to where they were prior to the crisis? Or do they retain some kind of premium because of uncertainty? And, you know, I think we're also kind of this is the first day of this ceasefire. You know, there's going to be a lot of debate over the next few weeks, but it might not last. But if I'm a commodity fund, I'm now holding more energy than I was before. Does that mean I'm holding less gold than I was before? Potentially, yeah. But you probably have made quite a lot of money and energy. You might be rotating that out and coming back into an area where you've you've given up some. If I'm spending more on defence, do I spend less on gold as a country? Well, I think I sell my gold and there's some countries in talks about this too. I sell my gold if I need to rearm because there's an asset that is highly valued and I can use it. Therefore I can turn it to missiles and guns and tanks and bullets or do so things that are going to continue to depreciate and turn them into real tangible assets. You do you sell your dollars to go and buy military hardware and invest in energy independence and resilience? Yeah, that's what I would be able to keep the assets. They're going to hold their value through time and get rid of the stuff that's going to lose its purchasing power. ABC Can we go for a moment? You probably like this opinion piece on the building back then by Aaron Brown. Our colleague talks about gold, keeps winning the battle with economists and it's got a very long time horizon, this particular story. But he talks about how central banks, including those in China, India and Turkey, are buying gold as a form of geopolitical insurance. We talked about this a lot in January-February even before this war took place. And it's a vote of a vote of no confidence, he says, in the system, if that's what this gold trade is all about, what is the what is the upside limit to what is how high can gold go? See, I love that phrase. I've never heard that before. A vote of no confidence. Yeah. I was at an event in LME week last year where this exact topic came up and the kind of the summary or one of the summaries from that event was actually the price of gold as an output of the problems. Yeah. And so there isn't necessarily a number that you'd say I can't go above or it's going to get to whatever else. It's just how big are the problems And if your author there is right and these problems just continue to get bigger and bigger and that vote of no confidence rises, then the commodity price will continue to increase. There's up to Western governments to fix the system. I think that's always been the case and that, you know, we as taxpayers are sitting here and the money's going out and, you know, where's it going and what's happening to it. And I think that the the underfunded nature of governments is going to continue to increase and that's going to create problems in the financial system. It's going to be reflected in things like gold. So we can still find ourselves in a situation where higher bond yields, which I'll you give you a reflection of concerns around government that do not equal sell gold because logically non yielding asset yielding asset higher what the yield goes you don't want the yield they can both rise at the same time. Bond yields and gold can both go up at the same time where you're being compensated with higher yields for a loss of purchasing power on you. Yeah, Yeah. And so gold does exactly the same thing. It rises in price to reflect that loss of purchasing power. So we talk about other metals. I mean, there are some metals that we if you talk to in your notes ahead of our conversation that maybe the world is under appreciating real assets. Yeah. The need for them and the, the role they play, I mean I feel like we talk about that quite a lot on this program because London has quite a lot of mining companies and is often one of the things that that stands out and makes London different energy and mining. But you think that investors should reflect more on all of the technology projects around products around the world and beyond that need these that needs the basic resources that you follow on a day to day basis. Yeah, I think I think prior to the conflict, if it were, you know, in the last few years has been dominated by technology in the trade and so on. And I think coming to the end of last year or the second half of last year and into the early part of this year, there was generally a more an inquisitive nature to investors looking for second and third order beneficiaries attached to the air trade. And so they were starting to kind of go upstream into the supply chain and look around and see, you know, discrepancies in valuation. You know, was the end was the trade at the end trading on a massive multiple and whether suppliers are benefiting from the same spend in terms of the CapEx that was going out there on a massive discount and that was the case is we're seeing this kind of rotation of capital into different areas but attached to the same trend. I think the commodity space is exactly like that, you know. It's just a little bit further upstream. It's not in the supply of the transistor. It's the things that the transistor is made of or it's the cat, not the cable manufacturer, but it's the copper that goes into the cable and so on. So yeah, I think people are looking across there. And so if the cease fire does last and if it does turn into some element of peace and it is sustainable over the long term, we'll probably revert back to the trends that were driving markets over the last few years with some extra stuff related to the impact of the conflict. But I think that's where a lot of the money will go back to and commodities will be a big beneficiary of that. A mining stocks still mispriced definitely. You know, we've seen a lot of retracement in valuation over the last few weeks. Big falls in and gold equities, big falls in the broader miners. Commodity prices have actually found flaws. You look at the flaws as in the base bases rather than the failings. But I think, you know, when we look at something like copper, five and a half dollars a pound seem to be the kind of floor that was that was found. It's come up since they're look at the disruption in the aluminium market. I think we touched on that last time. That has been pretty profound that those companies are likely to have a significant win on the back of those earnings and then you can go further down the tail into some of the metals that are less well known, the kind of rare earths and so on. You know, if this defence spending rallies and the allies actually starts to be deployed, we're going to see huge amounts of demand for those kind of commodities. And that's going to be long lasting because, you know, it's not just now a ceasefire. What about the restocking of the inventory that's going to take a long, long time. I mean, it's always great to see somebody else. We always appreciate it. Thank you very much, indeed. Every global head of thematic and sector investing joining us from BlackRock. You mentioned what's happening with the inflation story, what's happening with the interest rate story. Some Fed policymakers do remain cautious about the economic outlook. With the energy shock still very much front of mind. My concern at this immediate time is that we've got to get our heads around an oil shock, which is going to drive up prices in a stagflation three way potentially. Austan Goolsbee, Discover Fed president. So we're going to discuss more on the challenges ahead for central banks. Take a look at the bond market moves this morning. If you want evidence of that. That's next. This is Bloomberg. 745 here in London. This is the opening trade, of course. Welcome back. Wednesday, the 8th of April. And we are setting, as we all set out, for an incredible session here in Europe with some real strong gains expected on European equity markets. Will we see a lot? We will see a very different story for some of the energy names I'm looking at. Some of them cool down 10% perhaps as oil prices drop by more than 15% this morning. I guess not. Not to be not to be surprised about an aviation could be set to be one of the big gainers. Absolutely. Let's talk about the inflationary story around all of this as well. New York Fed President John Williams says the risks to inflation and employment from higher energy prices are in balance and that he favors therefore holding interest rates steady. He sat down with Bloomberg's Mike McKay in New York. To my mind, monetary policy today is really well positioned given where all of those dynamics have been playing out and well positioned to kind of wait and see on some of the effects of, you know, what's happening today. This isn't I'm not saying we're just, you know, in some kind of we can't act. I think this monetary policy is exactly where it needs to be. And then we can we can respond if the situation changes. Right now, I think the monetary policy, though, is pretty well positioned. You know, given what we've been seeing so far. Monetary policy is well positioned. But what about the economy? What's the state of the economy? Well, you know, if you asked me this a month or two ago and we would be talking about the remarkable resilience of the economy growing at 2% last year, looking to grow even faster this year. Clearly, with the conflict in the Middle East, that changes out a bit. I'm so I'm you know, consumers families are going to be paying higher fuel costs gas price with the gas price increases. So I've been bringing down my forecast for growth this year, probably somewhere between two and two and a half percent for growth this year. And unemployment rate probably staying around where it is now, 4.3%. And know economy, that's, you know, continuing to grow, but roughly, roughly at trend, again, driven by consumer spending and investments, especially in air. Well, you mentioned unemployment. You cut rates in the last year, we were told, basically to prop up the labor market. What is the state of the labor market? Is that accomplished? Well, it's hard. It's hard to read all the tea leaves because it's pretty complicated situation with the labor market. We are seeing some, you know, various kind of different signals. My if you look, my view is if you look at the unemployment rate, it's today at 4.3%. It's about where it was in July. So we've seen some, you know, stability there in terms of the unemployment rate and in job openings and some of the other indicators. So I feel like we've got in the labor market, we've seen the labor market more much more stable.

Now, definitely not a labor market that's weakening based on the economic indicators. That said, if you look at the surveys, including the survey that we do and the Conference Board survey, that's not how people are, you know, kind of feeling about the labor market. Definitely. We've seen a continued process of people being more pessimistic about the labor market, not about a recession or something, but just a view that this is a pretty low hire, low fire labor market and maybe the kind of views are not as strong as you would think, just looking at the aggregate payroll and unemployment data.

That was Mike the he's speaking to the New York Fed president, John Williams. That conversation taking place before we got the news of the temporary fire. Let's turn to that and the impact it's going to have on markets. And I spent 3 minutes talking about that with Paul Dobson, Bloomberg's executive editor for Asia. Marcus Paul. Good morning to you. I take stock of what you've seen through the Asia session. I mean, we are at a three week high for some of these Asian markets or for the Asian equity markets as a whole. And we can ask lots of quite difficult questions about how long this lasts. But at the very least, very moment risk assets are being bought.

Yeah. Good morning. That's. That's. That's the set up. And it all hinges on the cost of energy. Right. So we've seen the big declines in crude oil, WTI, the largest drop since the COVID era, and natural gas prices falling as well. After this ceasefire agreement, the hope being that energy will be able to flow back into the global economy and relieve some of those pinch points that we've seen emerging in recent weeks. So that does a number of things. I think, first of all, it boosts our risk appetite in general, but it also lowers cost in the economy. So that's favorable for the equities markets. So that's why you see gains there. It also reduces the inflationary impact in the economy. And so that's good news for bond markets. So perhaps a little bit concerned. She was simply there also having a big day, people taking away bets that central banks might hike. And I'm pulling back on a little bit of a hint that the Federal Reserve, for example, may actually ease monetary policy later in the year. A couple of other interesting nuggets for you as well. So we've got a much weaker dollar. The dollar had been a haven through this so far. We've got the emerging market currencies performing strongly. We've got in credit markets a couple of interesting things. Some new issue is coming to market suggest that maybe they're seeing this as a window of opportunity as spreads tighten again to get some deals away. And Pakistan, the standout gauge in Asian markets, they, of course, played a role as an intermediary in the talks in that market. Is getting the benefits from that.

Paul, what do I need to sustain the faith? Yeah, I think two things that are very important see that the ceasefire actually holds and that the missiles start flying and to that we start to get some shipments coming out of the Straits of Hormuz. There's 800 or so laden cargoes waiting to get out through that channel, which can do more than 100 a day and good conditions. I think that the market really needs to see that flowing pretty quickly in order to realize the assumptions that have been made in the market so far and justify the price moves that we've seen.

Paul. Incredible moves in bond markets. I know we've seen some of that in Asia, but certainly here in Europe, you described maybe a little counterintuitively, but this could flow into equities as well. Yeah. Yeah. So I think what we saw in Asia with the BNZ is a little bit of a hawkish hold there. But what they're saying is, you know, if we see second round inflationary impacts, then we might need to hike interest rates, otherwise we might hold off. And so that's what the market is starting to price in more broadly with energy prices coming down again. Paul, thank you very much. Put up some playbooks. Executive editor for Asia Markets. Let's get an update on some of the sectors that are going to be in focus. There are going to be many of them. I mean, which which sectors are not going to be in focus this morning? Let's talk to Charlie Wells and see what's top of his list. Good morning, Charlie. Good morning, Ana. So it's definitely going to be one of those flip the scripts, flip the script. Days were poised for a day like that oil price down, looking like a lot of these European oil majors could be down as well. You see the prices here, though, and you want a little bit more of a nuanced story, right? Because you want to look at maybe some of these higher beta names, the likes of Repsol, the likes of BP. They've gotten real big shifts because they have more of that upstream exposure. So look, to differentiate a little bit today when we're going to see a lot of activity. Also, let's flip and take a look at this great analyst comment about not getting ahead of yourself. You're right. This is a temporary ceasefire. It's great news. But again, anything going wrong here could significantly change the price of oil. So, again, not getting ahead of ourselves with these headlines despite a lot of the risk on sentiment, we're likely to see airlines again, a script that could change from what we've been talking about over the past few weeks where they've been under pressure. If you look at some of the clues that we've been getting from Asia, you see some of the largest carriers there in India. Industrial got significant green today. So let's take a look to see if a lot of this red here from these European carriers if that switches. But we've got to take another look at a great comment here from the head of IATA. Don't get ahead of yourself. You're right. Don't forget that it's not an immediate shift from oil prices going down to jet fuel prices going down. So don't get ahead of yourself is what some of the wiser voices here are saying. Miners, of course, looking like gold up, copper up, silver up. That could spell good news for a lot of these European mining companies. Charlie, thank you very much. Going by Charlie Wells there. A message just on the plane by terminal from the foreign affairs chief of the EU is talking about the opportunity that this ceasefire creates. But pointing out, you know, the Strait of Hormuz must be open and back to where we started the program. We'll be looking to define that much more closely. What exactly does open look like? Under what conditions will it be open? Can it be open? And what difference would it make to the amount of energy that gets out? Oh, just listen to what Paul Dobson had to say a moment ago. He got 800 stuck. It can do 100 plus a day. Does it therefore does it take seven days to get all that or we turned it into a war zone. It could be 135 a day. So it could take sort of six, seven days just to get all of the traffic that's in there out. You want to get other stuff in it? I don't know how the logistics work around this. And we've got a two week period which we know it's open. Yeah, How it's open, we don't know. I can see all of those risk assessment. Is everybody connected with the shipping industry will be making those right here. And now though, we build up to the market open where we are set for some strong gains for European stocks. This is been back. Couple of minutes to go until the start of trade, cash trade here in Europe for equities deals that are about to open as well. It's going to be big morning. We know that. Let's just kind of deal with what we've got so far. This is what S&P futures look like. We're up by 2.63%. US markets started sniffing out the fact that there was going to be a deal a little earlier. They had the opportunity to do so, but that's really up by 2.6%. Europe's leg is going to open huge, huge moves this morning and Europe has more energy exposure. Therefore, better energy outlook looks better for Europe. So you priced it a little bit higher. So maybe that's why we're going to see this morning. But the S&P is up by 2.64%. You are going to get a bounce stateside. Let's deal with what we are expecting for Europe. You're Stoxx 50 futures 5.21% Footsie maybe not quite as much. It's going to be to see what the oil majors do this morning. Looks like they're going to be under a little bit of pressure. The DAX, though, is up by 5.32%. One of the most sort of energy intense economies that Europe has, unsurprisingly, therefore, is going to benefit. But what do you do with the energy story? Do you what do you do with defensives this morning? Energy is the only one that's really been up over the last few weeks. You sell out this morning and buy everything that's been beaten up out of that. Is that the trade down? Yeah, let's have a look at some of the sectors that are going to be in focus. As I mentioned before the break, nearly everything in focus this morning as we watch for this to ripple through these sectors. Airlines certainly in focus, heads to certain degrees, but very much on the back foot as a result of the higher oil prices, as hedging could just take the edges off, if you like. So how much do they bounce this morning? How much of a retreat do we see for some of the oil majors? Those affect the focus on oil and gas. Maybe that's the the epicenter of the selling there. And that weighs on London. The mining sector in focus, I would add into that list, that guy, anything that is connected to the bond markets, anything that price is off bond markets, which is a lot of things, a lot of sectors, but real estate, utilities also in focus as these yields really drop today. Absolutely. So here we go. Let's take a look at exactly how Europe is going to open this morning. Go to the details we need to look for. Are the banks going to move big sector? Are they going to move off the interest rate story? What's going to happen with the energy sector? That's going to be interesting for two 100 out of the gate positive. Does it come a little bit higher? I think we're probably all going to see it coming in a bit higher. We're expecting maybe 3% on the Footsie 100 not seeing that quite yet. Stoxx 600 opening up 9/10 of a percent. I suspect this morning. It may take a little while to get some of these markets open, to get a full picture of what is happening. It's good to be to see how long it takes the DAX to get going this morning to get full pricing there. The IBEX is up by 1.25%. The Footsie continuing to climb up by 1.4%. Do you believe this energy move? The CTA is was super long. They have to reverse. But how long how sticky is that trade? How much of what we see on the screen this morning is going to be real tomorrow and the next day and the next day, I think is a real open question this morning. Do you buy the rally or do you fight it this morning? Key questions at the moment, the Footsie up by one and a half percent. The Sox 600 is up by 1.4%. IBEX is up by 1.2. As I say, it's going to take a while to get things going. This one, we may not get the full picture for a little while, but we're expecting big moves to the upside. So far, I'm not seeing it, but I suspect there is a market congestion that we might be needing to deal with this morning, too. Yeah, absolutely. Plenty of markets still close. Not getting the full picture on the CAC, the DAX, all the some heavy, heavily weighted companies. Of course, there we do have bond markets in focus and gilt yields dropping just like the rest of Europe, down 20 basis points at the ten year horizon. We're down 22 basis points at the two year horizon. So as I say, across the curve and as we've seen elsewhere in Europe, rolling back the higher yields of yesterday and doing more than that. So we are certainly focused on anything that is connected with bond markets. Just looking at the other sectors going where we are seeing early gains and certainly can see construction and materials. So that sector is the best performing was fast after the gains. Some of these building businesses, construction businesses, very reliant on energy prices, material prices, of course, personal consumer discretionary grocery stores. That's another sector where we're seeing quite a bit of positivity. So something more positive for consumers being factored in there. Perhaps only one sector in negative territory so far at this early stage of the trading day and no surprises for guessing that that is energy. It is down by 4/10 of 1%. But there were a host of stocks that are not yet open, it seems, across Europe. And so with that in mind, we wait for this to really sort of set firm. No, I'm just the only is the only market that I'm seeing on my screen at the moment that is delivering the kind of performance that I originally anticipated we would see first thing this morning. So Max, in Stockholm that we're 4% stocks, many, many companies not I, I just wonder how long it's going to take to get this thing going this morning. Yeah, Footsie is up by one and a half percent. IBEX is up by two, nearly 3%. But as you say, I just I think there's going to be a real congestion story this morning. At the moment, I've got 240 unchanged on my screen at the moment. So we've got 430, 440 up the stock, 622 down. But we've still got kind of 130. So it could take a while for this market and especially the ones that are going to be the biggest movers with the most attention to them this morning, then we could be on for some. And for some big technology now, the best performing sector by three and a half percent. And we see Infineon Technologies up by 9.7%. And this was an interesting feature of what we saw through the Asia session. The cost be really jumping some of SK Hynix, some of the other related companies and of course there's an energy component to it, but they weren't sold off necessarily because of their exposure stateful They were sold off because they've done so well in January-February and now they bounced back this morning and we see some of that coming through on on these markets. Sell sells down by eight and a half percent. So Siemens is up by which I'm trying to check, which seems to make sure that I'm looking at the right ones, even as energy is up by sort of 10%. So we think we either end up getting some quite big moves. You just you just buy what you sold. And so what you bought is that trade. Let's get some perspective then. Henry Allan joins us Macro strategies that Deutsche Bank Research. Henry, very nice to have you with us. What a day for stocks. The DAX just opening up, then 5% higher this morning, which is the kind of performance we were expecting really based on on what the future soldiers I mean, is this a good these these do you buy this is this a dip we are buying this morning? And if so, how long does it last? I think we can be confident because I think what Trump has done overnight is really open up that de-escalation pathway with the two week ceasefire. And obviously the hope for markets is that it won't just be two weeks that have extended beyond that. Something I was struck by and we've been writing about consistently is even before this ceasefire, you know, this oil shock was never really hitting the severity of several possible oil shocks. It wasn't hitting the severity we saw in 2022, let alone what we saw in the 1970s. Indeed, even before the ceasefire announcement yesterday, the STOXX 600 S&P500 only down five or 6% from record highs. This was not some huge bear market by any means. And I think one of the reasons for that is consistently investors were expecting there would be some kind of reversal. If you look at the energy futures curve, yes, front end Brent prices, for instance, were around 10 a barrel. But if you look at six month Brent, you know, even beforehand that was around $82 a barrel yesterday, come down to 77 today. So there was a $30 gap between front end price and what people were expecting in six months time. So implicitly, investors pricing in a temporary contract that was going to unwind. So the fact we've now kind of opened up that pathway, you know, I think we can take it with some confidence. Yes. It does seem as if analysts. Yes, very quick to declare what we all think we know about President Trump's reaction function and what's important to him with the political realities that loom on the calendar and say, well, this is going to be short, but is wonder whether that is that is that the whole story? I mean, do we if President Trump wants to step away, oil prices don't necessarily go down to 60, $70, do they? Not necessarily. But I'm conscious that with Trump, investors have been caught offside repeatedly. We've seen several of these moves where suddenly we've had this big risk on surge. We saw in January, a small one when we had the Greenland reversal. We were, you know, people were worried, was the US going to annex Greenland or something? And then all of a sudden they've announced a framework deal. The risk on tone comes back. Those tariffs he threatened and voided. We saw an even bigger one last year with the 90 day tariff exception about almost a year ago, exactly when suddenly the S&P was searching nine and a half percent as it looked as though we'd avoid that that global trade war. So we've seen several points where Trump has done the risk of move, we've done the de-escalation, we've then had the risk on move. And actually generally those have been sustained. We saw after the tariff adversity last year that that was then met with further escalatory moves. And Trump has said himself he wants to reopen the Strait of Hormuz, get a all flying for now, markets are still not back to their pre strike level. So that actually implies that if we did get back that oil prices have further to fall. Do you don't think that the market will say this could this could change quite quickly? And therefore just as a hedge, I need to put in not zero geopolitical risk into the oil price, I need to put 0 $20 in. So what is the difference to the earnings outlook if we're at 80 bucks a barrel versus 60 bucks a barrel, just in terms of the growth impact that that $20 might imply? It should. But I mean, one thing I mean, firstly, at the end of last year, oil prices were already at their lowest since 2021. We were at a low point with $6 back. We've coming down, said 73, I think. Yeah. So we're not actually a million miles away from what a lot of companies have been used to. And the other thing is the Trump's incentives, as we've seen repeatedly, not just with Iran, but with other things like green of like tariffs, like central bank independence, are geared towards a resolution to getting energy prices down. Gasoline price in the US right now are above $4 a gallon. You know, they're the highest they've been in either of Trump's two terms. We know that US consumers are much more exposed to stock market performance. That's been a point of vulnerability. Of course, we've got the midterms coming up. His own approval ratings have been falling, so all the incentives are geared towards a de-escalation here. TRUMP You know, even yesterday when he was threatening comments about civilization, he was still couching that in terms of, I don't want to do this. So, you know, it's clear that, again, Trump does not want an escalation. Do you think so? You think he can get oil prices back down? Let's let's call it the five year average. You think he can get them back down to 70 bucks a barrel? I mean that. In Iran do as well. But I think that's that's certainly the. Yes, I'm not I'm not saying we're out of the woods yet. And something that we need to remember is the oil price at $95 a barrel. Yes. And I'm from 110 and not down to the original point of 70, but this is at least giving space for central banks to not then respond with incredibly aggressive rate hikes. You know, it's giving us time. You know, at the end of the day growth impact what that that will. But oil prices have only been at this elevated levels for less than a month, really just over a month. Like you'd need to see that sustained over a period of six plus months for that to have meaningful growth implications. You know, we're not talking about recession or even kind of serious down here at this point. We're talking in the realms of two, three or 4/10 at this point. And that's if it's the stage already we're coming down state. So, you know, actually, if you also look at the data we've had so far, even covering the month of March, the strikes began on Sept 28. You look at data even for the month of March, it's been okay all things considered. You know, even in Europe more exposed. The energy shock the PMIs yes they slowed a bit. Still expansionary territory actually the composite PMI being upgraded a bit for the flash. Yes the US jobs report you know, the east end still very, very positive covering the month of March since the strikes began. We're not seeing some huge contraction. We're not seeing the data downgrades we saw back in 2022 when Russia, Ukraine know exactly how to find those out. And indeed, another difference of 2022 is that in 2022, people were pricing in a sustained oil shock. The six month Brent futures were above 00. But we've never seen that state investors never been pricing in a state. Also six months. Brent at 77. Henry You make me feel better. So that's that's that's all very positive. I was a bit concerned earlier that we would start to see downgrades, profit downgrades, stock downgrades almost as a result of a little bit of certainty being introduced to markets because if you were an analyst and you you can see energy prices have gone kind of crazy over the last month and you need to do something about that until things settle down and you can make a rational argument as to what your new assumption is quite difficult to to kind of get that through. So I then wondered whether we're going to see downgrades from here, given how little time we spent at 20 oil, then do you think we actually are not going to see too much of that? I think it's going to be pretty limited assuming we get the ceasefire path along the broad outlines the markets and other analysts expect. I think if oil prices you know, I think we spent a round 3 to 4 weeks around 00 a barrel mark and actually partly because futures have always been at the low point and yet lots of companies do base their prices off, you know, six months, 12 month futures and stuff. That impacts didn't hit everyone anyway. So, you know, a lot of that flows out the Strait of Hormuz. It was still taking some weeks before they got to their final destinations. And I think so long as it is a month, a lot of people will look through that. Yes, clearly it's a shock. I'm not saying will have no impact. But, you know, just as the textbooks would say, central bank printing, if it's a temporary shock of a month, you're not going to have a huge reaction to that. You're going to look through. I think a lot of companies will be basing their assumptions off the same process. So what's a problematic oil price is below 90. Okay. Is above 90. Is there a line in the sand where things become difficult? I mean, clearly it interacts everything else. But my threshold generally is about 00 a barrel sustained at 00 a barrel, not just a day at 00 a barrel. I mean, back in 22, we had around five months above 00 a barrel. Today we've had three or four weeks. This is not on the same day. I see the same. But I say, I suppose, appreciate it, Henry Allan MicroStrategy is joining from Deutsche Bank Research. Quick look at the Kosik, some of the key names that we watch out for here in Europe to get an idea of how we are trading. And there are some very, very substantial moves out there, it's interesting to see actually pharma not benefiting as much, but everything is doing well. Luxury's having a good day. Even the Fed stocks are rallying this morning from Intel as higher tech is up. Schneider Electric is up nicely as well. Nestle may be one of the places to hide up, but not as much. So that's the trade this morning. We're basically saying pretty much across the board gains energy. Maybe the one exception. Let's talk to Charlie Wells, get an idea of what he's seeing in the energy space and there are some decent moves to the downside. Good morning, guys. Yes, So we were seeing a lot of movement down here in these European energy majors, Shell, BP, total gulp as well, all significantly in the red on the decline in the oil price. But when you dig in, you see some differences here, right? BP, they've got more of that upstream exposure, so more sensitivity to the changes in that oil price. So again, this is a story we're expecting to see based on that. But again, this is one of the only areas where we're really likely to see red today. Take a look at miners. That is, again, a very different story We've been telling. A very different color here as well. Right. Fresno up over 10%. They've got a lot of exposure to gold. We've seen a lot of these asset prices increase. Gold up, silver up, copper up on, you know, excitement on optimism about the economic story that had been so downbeat recently. A lot of these other European names in the green because of copper. You think Anglo American, you think Rio Tinto and you start to think about copper. Let's flip and look at airlines as well. They've been such a negative read over the past few weeks, not just because of jet fuel price can. Stearns, but also because of disruptions. Right. Because of the fact that there have been so many flight cancellations and backlogs. You see IAG up TUI up significantly. That could also be a read on the consumer, right. On a more budget conscious consumer, more getting more flexibility here. And again, a lot of green from these other major European carriers as well. Let's talk about banks, because that's a little bit more of an indirect story. There have been concerns at banks on the macro backdrop, but again, you're seeing green here. You're seeing a lot of upticks in these major names. And this could be really a relief on concerns about rates going higher in the wrong direction. That story could start to be changing and it could be bringing a lot of the optimism that we're seeing related to the ceasefire news that's sweeping through the markets today. Charlie, thank you very much. Yeah, that relationship between rates and banks has been complicated. In the month of March, Charlie Wells with the latest on some of those stocks that are moving, as we were just hearing from Charlie coming up, are there blue skies ahead? Airlines takeoff on the ceasefire between the US and Iran. We hear from the head of the airline industry's global trade body and discuss the impact on aviation, next. This is me back. We hopefully will see some flow of oil return, which will be a positive. So the airline industry has been impacted by both the supply of crude, but more importantly, the supply of the refined product, because a lot of jet kerosene was refined in the region. And that obviously is dependent on reopening the straits as well. That is, of course, the IATA director general. And we should note, incoming Indigo CEO Willie Walsh reacting to the news of the two week ceasefire between the United States and Iran. Airlines, of course, consume an awful lot of fuel. They are highly exposed to what happens with the fuel price, with the jet price. And unsurprisingly, this morning, what we are seeing is a very big bounce in some of the European names. So IAG, Air France, Lufthansa all bouncing strongly from here. Let's talk a little bit kind of what happens next. And I think that probably is the question a lot of airline CEOs are going to be asking themselves right now. Let's join Bloomberg's global aviation managing editor, Benedict Camil. He joins us from Berlin. Benny, good morning. It is unsurprising to see the airlines bouncing back this morning. They they they are going to like a cheaper jet fuel price, but are they going to get a cheaper jet fuel price? Well, they probably will. The question is whether consumers will also get cheaper tickets. What you have seen is a reaction on the price side as far as the consumer is concerned. You've seen these fuel surcharges. You've seen extra cost on on baggage. We only had yesterday Delta announcing that. And that's probably something that will remain in the market for the foreseeable future. We just heard from Willie Walsh that we've heard from other airline executives saying not so fast. Yes, this is good news, but you can't just sort of swing the pendulum back via a single tweet, as it were. So this will take time to find its way and work its way back through the system once companies have gotten used to higher prices. And remember, the demand is there, That's still strong demand out there. The bookings are strong. So once you've locked in these higher prices and you see people still buying the tickets, it'll be very hard for companies to sort of pay them back. So I would wager that over the last of the next couple of weeks, you will see still see these higher prices, particularly as we head into the peak summer travel season. Now, what does this mean for the operators in the Middle East, Betty, Because they really have reshaped the long haul industry in recent decades, Qatar Airways, Emirates and the like. I mean, what are we expecting how how quickly we're expecting them to return to full force. Again, it won't happen overnight. If you look at the last five weeks since the war started, they really pared back operations almost to zero and have slowly started coming back up. But remember, a lot of these aircraft remain grounded. Qatar Airways has quite a few aircraft sort of out of position. They've store them in places like Spain. They have to bring them back. They have to bring crews back. And importantly, they have to bring back the story, the the demand picture that people still want to travel through this part of the world. Do they want to be stuck there again? There is that concern. So that will take time to get people back to rebuild the reputation, as it were, of these airlines. One way to do that, speaking of prices, will be via lower fares. So if you if you're looking for low fares, that's probably the place to go. Emirates, Qatar, Etihad, they will all try and bring back demand through lower fares. But remember the other airlines you mentioned, Lufthansa and Air France and so on, they've also not sat still. So they have pushed more capacity into the market, into routes like Asia and so on. So sort of unwinding all of these sort of changes. That's going to take a while probably into the summer and if not beyond. But for a while it looked like maybe the US carriers were going to have an advantage. They would have access availability when it came to fuel to jets and that was going to potentially work in their favor. Does that go away now and what message do you think Ed Bastian delivers today when Delta kicks off its earnings? Yes. As he said, Delta will have their earnings today midday. And it'll be interesting sort of how bold the company might be in terms of its prediction. Will they issue a proper forecast? Might they refrain from one? That's something we'll be looking out for. A couple of weeks ago, a lot of the airline executives came together in Washington, D.C. for a big conference. And the the mood was was really quite jubilant. The demand was there. People were booking. Some of it might have been sort of booking quickly now before fares rise. That's the big question, whether people still rush to buy these tickets now. And, you know, as I said, the demand still is there. But it's it's it's a it's a an advantage that the U.S. airlines have had for a while that might go away fairly quickly. Penny, thank you very much. The BBC's global aviation managing editor bringing us these global airline stories. Benedict Kamel, thank you for joining us. 822 in London. Back to the broader market story and airlines are part of that, of course, airlines doing really well. Elsewhere, we see European equity markets really on the front foot, up by 4.9%. The Clarence up 4.2. The Xetra DAX getting the best of those gains by just shy of 5%. Let's bring into the conversation Bloomberg senior strategist Neal Camplin, who has been taking the pulse of the markets this morning. And they seem to be very much alive and well now in fine form. So what have traders saying, the DAX just 5% higher this morning. What a right saying. What are you hearing? First thing, obviously, clearly a relief rally. The the move that we've seen in the markets this morning, we've only seen these kind of moves above 5% for for the stocks on four previous occasions in the last decade. Three of those were during COVID and another was during the Ukraine Russia war in 2022. So the first thing is, you know, one thing is one investor said to me this morning that in a short term, this market remains untreatable. A second basically mentioned that what we've seen in terms of hedge funds is a massive decreasing of their exposures. If we think about what happens in degrowth saying that is been a lot of the time the risk managers take control of those books and reduce the leverage in those books. Are they suddenly going to regrows, if you like? Are they going to suddenly increase those exposures? I think that's unlikely. This is a pause. This is not a an end to the troubles in the Middle East. As we said, you know, the choke point has been over the Strait of Hormuz, yet Iran basically has back that under control. Will it will Israel remain the ceasefire? Many of these questions are being are being asked today. Now, the trend follows follows the CTA funds, which are very much momentum based. But we're hearing from traders this morning that they were effectively long energy and short equities. So you're going to see a certainly a bounce based on a reversal of that short term, short term effect. Then on the other hand, if you talk about momentum and with them being so quick and moving around so quickly. The other thing to remember is that to quote a classic phrase, that momentum often is following the following of sheep and it to quote Gordon Gekko, Wolf, from that film. Of course, sheep get slaughtered. So be careful in terms of trying to follow these short term, short term moves as the CTAs come back in reverse. Those some of those positions of the levels I need to think about, are there other levels I need to watch out for that will push them even further. That will drive this rally on. Yes, we had some data that came through this morning from some of these chats with traders talking about Goldman saying that these CTA funds at about 6740 on the S&P and above 6800 will see a sort of 50 billion of equity demand to by push up potentially to 200. So that's a 4x increase to follow that trend in the short term. So the index level, you may well see sort of the macro funds, etc., buying. But underlying what have we seen in the last couple of weeks? Certainly for MSCI World Index, we've been trending a below average volumes. So that suggests that active managers real sort of the money managers on deploying capital at the moment. And I think until we get a longer term solution scenario and we're coming into earnings season to see whether we're yet going to see impact in terms of outlooks, it remains to be seen. To be fair, thanks to thanks for the update. Really appreciate it. Bloomberg senior strategist Neil Campbell. Figuring out what's going on this morning and how far we go. What are we going to talk about next week? We'll get back to the fundamentals in some ways, try to understand what is happening on the ground. Sometime back from Chatham House is going to be joining us next. Is this is this situation sustainable? What's the situation after look like? What is the Strait of Hormuz look like after? What does Iran look like? All of that coming up next. This is blowback. This is the opening trade 30 minutes into a session. And what an incredible Wednesday session this is turning out to be. Then European equity markets firmly on the front foot, up by just shy of 3.9%. The Xetra DAX getting the best of the gains. It was over 5% higher by 5.2% some moments ago. Just paring those gains a little bit, as you were saying earlier on, one of the most energy intensive indexes doing well on the back of those steeply lower oil prices. And that really is the underlying driver of everything this morning, the Footsie 100 energy intensive in a different way. A lot of energy companies listed there. And that is one of the sectors. In fact, the only sector when I last looked in negative territory. And so that market is up, but only by 2.4%. The cat Carol making that other nice point this morning that it isn't just those sort of first order sectors affected by lower energy prices that are getting a boost today is technology consumer products that includes luxury Guy, what do you say? Let's take a look at these numbers. These are you know, you don't get to see this very often. Okay. So let's just kind of work our way through what we're seeing on the screens on our Bloomberg this morning. 532 stocks are up in Stoxx 600. Only 67 are down. And i just mentioned some of the names that are certainly going to be at the top of that list, the energy names. I'll show you those in just a moment. Check out the volume you off to see volume days like today. In fact, they come along very, very few and far between 160% up on the average volume that we've seen over the last 20 days and the last 20 days. All seeing clues. Obviously, the bulk of what we've been seeing in terms of the conflicts in the Middle East, but you don't often see a volume day like that. So there's big repositioning happening, big rotation happening that's driving the volume. Antofagasta, SML, HSBC up. So the miners are tracking higher. Unsurprisingly, they are energy intensive and you going to see maybe a return to normal flows in the global economy. Technology is doing well as well. That's interesting is the trade you certainly seen that coming out of Asia. SML is up by six points at 7.63%. What we were watching for this morning was whether or not the banks were going to react. Now, HSBC, slightly different picture, but nevertheless, let's kind of extend that theory, an idea it strikes me very rapidly. Are the banks going to respond to that? The answer you already now know is yes. Big chunk of the European equities universe down side, chills down by, let's call it, 7%. BHP's down by 8%. Freight rates. Do they come low from here? Probably. That would seem to be a logical conclusion. Therefore, what we're seeing today is that people are masked down by 2.1%. Let's get an update on some of the other news flow that we're covering this morning. Moody's has cut the outlook on the flagship fund of private credit giant Blue Owl Capital two negative. The rating firm move the outlook on blue owl credit income core from stable after, quote, significantly higher than peer redemption requests. In the first quarter. Macro hedge funds struggled in the month of March as the war in the Middle East upended inflation expectations, leading to steep losses at many of the industry's largest firms. Sources say Sony's haters at Jupiter Fund lost about 12% in the month of March, and Bloomberg understands the breadth and how it most often fell 6.6% for the worst monthly loss in its two decade plus history. And owners are working to understand the fine print of a US Iran ceasefire that could temporarily unblock the Straits of Hormuz and open an exit for more than 800 vessels trapped in the Persian Gulf. President Trump earlier said the US will be, quote, helping with the traffic build up in the Strait of Hormuz. The ceasefire by time for the US and Iran to potentially reach a longer agreement to end the six week war. Let's get to blame. That's demonic possession. With that in mind, she is in Dubai for us. And Jomana, so far, is the ceasefire holding? What do we know about the durability of this ceasefire? Yeah, well, it was a bit hit and miss in the early hours of the morning. I will say that even after the ceasefire was announced, we still saw a barrage of incoming projectiles being directed at various countries in the Gulf, including Israel and Israel as well. So that has subsided. And I think now that there's a combination of feelings in the region, number one, relief that we've averted the very worst case scenario. And of course, President Trump's announcement vis a vis the ceasefire came about 90 minutes before that deadline in which he had threatened to unleash destruction on Iran's infrastructure. So a relief that that outcome was avoided. But at the same time, perhaps a little bit of skepticism about the durability of the ceasefire and whether it can actually translate into something more permanent. Now, overnight, the Iranian National Supreme Council put forward their list of terms of what they would like to see in order for this to turn into a longer term cessation of hostilities. And there's still very maximalist demands and one of them is essentially maintaining control, maintaining sovereignty over who passes through the Strait of Hormuz. And this is clearly a non-starter for many nations and Gulf nations in the region. Other maximalist demands include the US removing their sites, their bases from the region, war reparations, assurances that the war won't happen again, and another one, including that all operations and their proxies in the region need to stop as well. So many of these demands are unacceptable. And indeed, we've heard from the Israeli prime minister this morning and he said that while they subscribe to the US Iran ceasefire, they do not subscribe to the fact that the ceasefire should be all encompassing and that their war with Hezbollah will continue. So still a lot of questions about whether this is going to translate to something more permanent. But for the time being, a step back from the brink and of course, for the foreseeable future, no threat of imminent escalation. What do we know about the talks, Jomana? Yeah, well, the chief mediator here was Pakistan. And we know that there was a huge last ditch attempt to get these diplomatic channels working with success. And, you know, shortly after President Trump put up that true social post, we also heard from the Pakistani prime minister as well. He then extended an invitation to all parties to attend an in-person meeting in Islamabad in the next few days. And a short while ago, the Iranian state media actually reporting and this is state media, I should say, but they're saying that Ghalibaf will lead the delegation from the Iranian side. He, of course, is the very outspoken speaker of the parliament. He's also been very active on social media, very strident and critical of the United States. And on the other side, the they are also reporting that J.D. Vance will be leading the discussions from the United States overnight. A lot of the reports suggest that J.D. Vance did play a seminal role in getting this deal across the line, the ceasefire agreement across the line alongside China. President Trump actually did credit China in some comments this morning. He suggested that China actually put a lot of influence, a lot of pressure on Iran to come to the negotiating table. So, again, some hope of a more substantial diplomatic breakthrough. And it seems as though those talks actually are going to go ahead later this week in Islamabad. Donna, thanks for the update. Appreciate it. Do you want a researcher joining us out of Dubai? Let's talk now to some of you. Middle East and North Africa program director joining us from Chatham House. Good morning. Is the conflict over? Good morning. The conflict is paused. And that's just because the negotiation

is set to begin on Friday, as Jomana laid out. But really because both sides have still quite maximalist demands and we have to see how much room for compromise there is between the two negotiating positions.

This is a welcome pause. This is a war that nobody was winning. All sides have come out much weaker. But I still remain cautious because Iran's demands are really quite extreme and it's hard to see them coming out, having achieved everything.

Do you think the Straits of Hormuz returns to the free flowing nature that we saw before the conflicts? Do we go back to that? Do we not go back to that? What is the new reality look like? Well, I think that's the key question. And if the Strait of Hormuz does not go back to the status quo before the war, then obviously I think this war has a chance to recommence at any time. Iran knows it has its leverage and it can always exert that leverage.

This will all depend on what kind of guarantees Iran obtains from the United States. Is this cease fire going to become permanent? That is one of the most important demands that they're asking for. They do not want to see a repeat of this war. Secondly, what they are also looking for is so-called compensation or sanctions relief or access to their frozen assets. If Iran has economic lifelines that can help lower the sort of demands on the Strait of Hormuz. Iran is going to be isolated in the region. There is no return for Iran to the ties it had with its neighbors, particularly on the Gulf Arab side specifically. So that's important to remember. And if those conditions, if Iran is extracting a toll on the Strait of Hormuz, that is going to perpetually harden Gulf Arab views of the Islamic Republic.

Hmm. Good morning to. Can I ask a bit more about the different factions within Iran? The hardline factions best is the reformist. To the extent that it's possible to identify who's in charge of those right now as Iran. It was telling us at the Speaker Ghalibaf on the Iranian side, according to Iranian media, is going to be leading the delegation in the talks. What does that tell us about. Does that tell us anything useful about the extent of what Iran will be asking for here?

Well, in terms of who's in charge, I think right now it's important to see the Iranian system as institutionalized. And they rely on a sort of consensus making decision process, decision making process. So LeBoeuf is probably out there as a key figure because he's well known. He's a regime insider, He's conservative, but also pragmatic and has close ties as a former member of the IRGC. So he brings together a lot of different elements from across the Iranian system. He will not make decisions on his own. He will take, I think, what's on the table back to Tehran. And I think we will see a lot of back and forth. The state and health of the supreme leader is still very unknown. There are reports, of course, that he's incapacitated, but we should see this very much as a structural decision making process rather than an individual that is in command and control.

And what about Iran's proxies in the region? So how much sway will Iran have over them and how they respond at this time? And we keep in mind, of course, Israel has said that it does not consider this to be a cease fire. On the Lebanon front. Yes, that's an interesting demand on Iran's side, looking to shield Hezbollah and the Houthis from further strikes. I think that demand is really unachievable. And if Iran goes ahead and cuts a deal with President Trump and leaves the Hezbollah front vulnerable to further Israeli incursions and strikes, that will say a lot about the dynamics between Tehran and these proxies. Ultimately, I would imagine that the Islamic Republic will prioritize its own interests, but that is certainly going to be a sticking point and one that Netanyahu has already made clear is not connected to the process in Islamabad.

So how much sway does Beijing have in Tehran right now? I think China has certainly played a very important behind the scenes role. I think that they pressured Iran or convinced Iran that as of right now it has increased its leverage through the control it exerts over the Strait of Hormuz. And this was the right time to come to the negotiating table. So China also just vetoed a resolution at the Security Council, and perhaps this was part of the quid pro quo. China would support the blocking of that resolution, but would encourage Iran at least to come to the negotiating table. And we should see this as a first step. This is a pause. This is not a final settlement. We can all celebrate when this is done based on the terms and conditions of the deal.

Yes, this is a pause there, not the final deal. But if we look ahead a little bit about what we try to project forward, what we have learned from the last six weeks or so, this war in Iran. And I'm thinking here about if we look through the lens of great power rivalry and we think about the U.S. and China and picking up from guys question about China and to what extent is thinking about the US and China changed in the region? And there might be quite a nuanced answer there, I'm not sure.

Well, I think it's important to remember we're still in the fog of war without a settlement. I think we're getting more details out about how this war was planned and organized. Analysts like myself for for the past six weeks have been critiquing the planning of this war that President Trump entered this war on faulty assumptions, certainly convinced by Prime Minister Netanyahu and The New York Times has released important and important story confirming this. I think certainly people around the region are looking at the execution and the prosecution of this war and wondering what it has achieved. This was, remember, only meant to be four or five days. And in the sixth week there has been huge amount of damage, economic, human costs that we haven't really calculated yet. And relations across the region have been set back, I would say, by a decade, if not two. There is deep mistrust and so countries are looking at the United States, I think, and wondering what has been accomplished beyond all of this damage. And it looks like President Trump is cutting and running. He really wanted this deal and he wanted to extricate himself from this war. So I think this will raise questions. But it's also important to remember that China has played a behind the scenes role. China hasn't done more than that. China didn't swan in to support the Gulf states in any way either. It sort of managed its own side in negotiations with Iran, and that sort of leaves the region caught up in a great power rivalry without any of its own off ramps and with limited tools to manage conflict that is imposed by external forces. And I'm thank you very much. Thanks for bringing us up to speed with your analysis on the Middle East and North Africa program director at Chatham House. Coming up on the program, we'll take a closer look at the outlook for oil as it plunges below 00 a barrel on the cease fire, temporary as it might be, at least for now, in the Middle East. That is next.

This is going back. Welcome back. This is the opening trade. 49 minutes into a session that is proving to be really very positive, especially over in Germany for these European equity markets as we price in this two weeks at least. Cease fire, That is the plan. That's what European equity markets look like then. And we need to focus on what's happening with the go with the oil price front and center, what happens to the oil price, what goes on next? Kind of do we get back to where we were before that? That's one of the questions that everybody's is trying to figure out. Right now, it's down. Oil this morning the most in six years, obviously, after the cease fire deal has been agreed. Stephen. She joins us now, who leads our Asia energy coverage to give us a sense of of kind of where we go from here. Stephen, the screens dramatic this morning. What are you hearing, though? What are people saying about what comes next? What are you seeing on the screens? And is that real?

Yeah. I mean, I think there's obviously a relief that there has been some sort of deal made. I think there is a reason for the sell off. You know, the risk to more infrastructure damage has decreased significantly. Right. That was one of the big risk premiums that was being priced into Brent was every day that went by as there were tit for tat attacks, as Iran sent drones and missiles across other countries and across borders. There was always fear that there would be material damage to infrastructure that would take years to to to repair. Luckily, with this ceasefire, those risks have evaporated. Now, what's being focused on is Hormuz, right? The part of the deal is opening Hormuz, but we haven't seen any real meaningful increase in shipments. Of course, this deal is just hours old. It will take a while for ships to figure out what their orders are, how this will go, how the exact passage will happen. So I think that's what the market is focusing on now, because the supply situation hasn't quite yet changed.

Yeah. Stephen What will help us understand the definition of open and closed when it comes to the Straits of Hormuz? The Iranians seem to be suggesting there's going to need to be some participation from their armed forces to allow some of these ships to get out of the Persian Gulf. So you can see we're showing a map now, almost life, I think, of where many of these ships are and many of them will want to leave the Persian Gulf to try and deliver whatever it is that they are carrying.

Yeah. I mean, there are over 800 ships, a lot of those being oil, fuel and gas tankers. And exactly how they're going to go through is unclear. Of course, Iran has said that there will be some sort of inclusion of there are military also if it reaches technical restraints. I mean, I think what we have to look at is the capacity, because over the weekend we had 20 ships go through. That was the highest level since the war began. But you have to remember that on a daily basis, there were 120 hundred, 3040 ships going through Hormuz. So are we going to be getting back to pre-war levels? It's unlikely, according to the analysts and the traders that we've been speaking with. Instead, you're going to likely see an increase in the amount potentially. But that, again, depends on how much is Iran able to take our ships going to be going just through the Iran route, which has been sort of a proved route over the last few weeks. Will they be able to go through Omani waters kind of hugging the Omani coast? We saw one empty LNG tanker do that over the weekend. Will we see more ships go that way? Also, what is the tolling mechanism? AP reported that Iran will be able to receive tolls for the ships that go through, which had been also kind of common practice over the last few weeks, over this two week cease fire period. It's unclear how that will all happen. So what we're likely going to see is a lot of ships congregate now near the Dubai Anchorage area as they figure out insurance if if the crews are willing or are to go through the safety reasons, if the ship owners are willing to take the journey. Discussions with Iranian officials, discussions with Omani officials. I think there's a lot of technical things that sort of need to happen before we really start to see the flows increase from where we were over the weekend.

Okay. Yeah, we're just showing that chart that's even on the screen, showing just what kind of drop off we've seen in the amounts of traffic going through Hormuz. Stephen, thank you very much. Stephen Kaczynski in Singapore, thank you for that. Joining us now with a look at the markets trading day ahead and into the rest of the week, Bloomberg's Skyler Montgomery. Cody is with us this morning. Skyler, your thoughts this morning. Looks like quite a lot of conviction on the face of it, doesn't it? But I mean, this is reliant on a ceasefire holding and that's only two weeks.

Yeah, absolutely. I think the moves today are very clear. You're kind of just undoing what we've had over March. So those kind of losers and equity markets, those were the economies and equity markets that were more exposed as energy importers where there was less of a sector weight towards energy and more towards those sectors that use commodities as an input cost. And so we're really going to hurt from an earnings perspective. So that's just being undone. You're also seeing the kind of losers in terms of Korea, Taiwan, those kinds of moves that you saw very large in March to the downside, they can at least be kind of 50% on down or more. So given the move we've had in Brent, if you stay below 100 or Brent, is that okay? That's the question. I think everybody trying of how much of a premium do I put onto the oil price now that I need to kind of keep there? And what level are we at a problem and what level are we not because we started the year at 60 ish. Yes, this is that seems like a long time, you guys. Massive move and you've already seen in the economic data and you've already seen it in the central bank response to that economic data. Right. The Bank of England was supposed to cut in March and then they didn't because you had the speculation there. You start you're certainly not looking, get cuts from the ECB and that's a negative for equities. And so there should be a downward valuation, presumably.

Yeah, exactly. I mean, there will be some kind of inflationary impact. We've seen it very clearly in PMI data that input costs have risen. And so that means that earnings should have some kind of a downgrade from that. What I will say is equity markets are very good at looking through shocks. So during COVID, you're able to look through to that earnings momentum to the upside, but you've got earnings downgrades first, and we haven't had that this time around. If you look at euro stocks expectations for EPS for 2026, they've just been flat throughout the conflict because people have been hesitant to do those downgrades because they don't know where that was at this point.

Yeah, again, so I mean, we talked to Henry Allan earlier. He was sounded a little more relaxed about the fact that, you know, energy for oil prices didn't stay above 100 for all that long. And that seemed to him to be quite a material factor as to how much damage this does. But we need to be aware that this could do more. You think? Schuyler

Yeah, and I think part of it, too, is the yield story. We're not going to return to the low levels and yields that we had previously. We're certainly not going to get three cuts from the Fed, which had boosted equity markets previously. And so you do need some kind of valuation adjustment for that because the energy shock starts now. These things are going to come out, going to take a long time to get there. Price is going to remain high for quite a while. Scholar, great to see you. Thanks very much for stopping by to see us. It's Colin Montgomerie Cunning from Bloomberg and Life. That does it for us. What a day. The picture on the screen on your plane by terminal is extraordinary this morning in terms of the rally that we're seeing. Look at the bull market as well. Look at the commodity market. It's just all over the place. Doesn't sustain. Yeah, energy sector, the only one in negative territory. The reasons we all understand Travel Leisure that sector by 7.4%. Having a good day, That is it for our show this hour. This is back.