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Over the past month, the escalation of the Middle East conflict has dominated global financial markets. On the last day of February, the US, in coordination with Israel, launched a series of airstrikes and military operations targeting Iranian government and military facilities, including the assassination of the Supreme Leader Ali Khamenei.

Iran’s response was swift and included military retaliation across the region against Israel and several other Gulf states. As of the time of writing, there has not been a conclusive resolution to the conflict, and this has resulted in major disruptions to shipping through the Gulf and a sharp increase in energy prices…

When markets reopened after Easter, the conflict in Iran was inevitably top of the agenda. On Tuesday, President Trump threatened “A whole civilisation will die tonight” if a deal to reopen the Strait of Hormuz couldn’t be reached by his 8pm deadline. Thankfully, Trump backed down and agreed to a two-week ceasefire…

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Last Monday, President Trump sent US markets down after he threatened to “obliterate” Iran’s power stations and water plants if they didn’t “shortly” agree to peace terms. Optimism that Trump was trying to wind down the war gave markets a lift on Tuesday and Wednesday, with the S&P 500 ultimately soaring 6% and ending a five-week losing streak. Trump’s prime time address on Wednesday evening failed to reassure investors and hit markets when they opened again on Thursday. However, by the close of play, US indexes recovered and finished just below Wednesday’s peak as we went into the Easter weekend.

Six weeks into the war, as last week demonstrates, the conflict and Trump’s rhetoric continue to mould global markets…

Oil prices fell on Monday after President Trump postponed his threaten attack on Iranian power plants. Similar to what we saw during “liberation day” tariff U-turns last year, there was a flurry of unusual activity on oil and S&P futures before Trump announced the postponement. The number of bets on crude and brent oil contracts effectively increased threefold exactly ten minutes before the announcement sparking fresh speculation about insider trading…

The Federal Reserve, Bank of England (BoE), European Central Bank (ECB) and the Bank of Japan (BoJ) all voted to keep interest rates unchanged last week.

Fed board members now expect US inflation to reach 2.7% by the end of the year, up from December’s prediction of 2.4%. Regarding the impact of the war in Iran, Fed Chairman, Jerome Powell, cautioned “We just don’t know what the effects” will be…