The ECB was burned by being late to react after Russia's invasion of Ukraine in 2022, but the peace deal in the Middle East raises the risk that this time it made an error of hiking rates too soon

Overall, as has been the case for a number of years, the continued surge in tax revenues is more than compensating for spending growth

The dollar’s appeal during heightened uncertainty has interlinked with the energy price shock arising from the Middle East conflict

UK bond yields are rising while sterling and UK equities have fallen

US markets have benefited from the economy’s relative insulation to geopolitical risks and solid corporate earnings

Policymakers have begun to lay out fiscal supports to offset geopolitical shock

The overarching theme is one of investors pricing in the end of the conflict

Will the shift in power in the Strait of Hormuz permanently dent trade flows through the key channel?

Governments have less capacity to offset the oil shock than when Russia invaded Ukraine

With evidence of some market complacency regarding the potential economic impact from the current conflict, interest rate markets tell a very different story