The US-Iran conflict has rapidly escalated from a geopolitical risk to a worldwide supply chain disruption. The Strait of Hormuz, through which 20% of the world’s oil flows, was effectively closed by Iranian military forces, with tanker traffic falling to zero. 1 That way Iran put in jeopardy the safety of the world’s energy system.

The European credit market may be approaching an inflection point this week. A convergence of shocks, fueled by further escalation in tensions involving Israel, the United States, and Iran, has created a state of Knightian uncertainty, a condition where past data can no longer be applied to predict future risks. To begin with, the sovereign sector witnessed a notable anomaly as BTP, Italian government bond, outperformed the safe haven Bund, German bond, in terms of investor risk appetite during times of uncertainty.

Earlier this week, Toyota Motor Corporation faced pressure from activist investors to improve corporate governance by unwinding its cross-shareholdings. Activist investors are shareholders who use their equity stakes to influence management decisions, including corporate strategy or governance. Their primary goal is to prevent value-destructive managerial actions and enhance shareholder value.

Copper shortage: Recent volatility in the copper market has raised concerns about a potential global shortage driven by supply disruptions and rapidly increasing demand. Sharp drop in Brent crude oil: Over the past week oil market experienced the biggest drop since the beginning of US-Iran conflict.

Banking resilience comes under short-term pressure. European banks remain fundamentally strong, but rising volatility and weaker risk appetite have pushed the sector lower in the short run. • Geopolitical tensions are driving market rotation. Higher oil prices and Middle East tensions have encouraged investors to move away from cyclical sectors and toward areas seen as safer or better positioned

U.S. Treasury yields moved higher during the week as geopolitical tensions and rising energy prices pushed real yields upward, tightening financial conditions and partially reversing February’s bond market rally. Higher real interest rates and increasing artificial intelligence infrastructure spending pressured large-cap technology valuations, with investors shifting focus toward companies demonstrating clearer near-term AI monetization.

U.S. Treasury yields moved higher across the week of March 2–6, effectively ending the bond market rally that had dominated much of February. The increase in Treasury yields was largely driven by the surge in global oil prices following geopolitical tensions in the Middle East. As a result, investors demanded a higher return for holding long-term debt, pushing the 10-year Treasury yield to around 4.13%.

Volatility in precious metals market: Gold, silver and platinum faced sharp price swings during the week, driven by Middle East tensions and a stronger U.S. dollar. Fertilizer under fire: The Israel–Iran conflict has disrupted fertilizer production, transportation, and trade in and out of the Middle East, including major exporters not being able/willing to fill the gap in the long term

The coordinated airstrikes on Iran by the United States and Israel led to a spike in global oil prices. As the country relies heavily on imported oil, any disruption to the Strait of Hormuz, one of the world’s most critical oil transit routes, has significant economic implications. Such disruptions affected not only the oil industry but also energy-intensive sectors such as semiconductor manufacturing.

Natural gas being the main driver for spreads: Escalating tensions around the Strait of Hormuz have pushed European natural gas prices even higher while storage levels remain critically low. This energy shock is increasing inflationary pressure while eurozone growth remains weak at 0.2%. Semi-core shifting from risk-on to risk-off: French OAT and Italian BTP yields climbing faster than German Bund yields, leading to wider semi-core and peripheral spreads. This reflects a shift from a risk-on to risk-off environment.

Recovery, Repatriation, and Margin Pressure: China’s personal luxury market is showing early signs of recovery in 2025, moderating from steep 17-19% decline in 2024 to 3-5%, however the rebound remains confidence driven and margin compressed suggesting a fragile rather than structural recovery.

Our view: The market prices RKLB as a launch provider while the company operates as a vertically-integrated defense infrastructure supplier earning toll-road economics across satellites ($1.3B SDA backlog), components (GEOST sensors to competing primes), and HASTE hypersonic testing (monopoly provider).