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Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 28/04/2026   

How could energy impact investment markets?

A tighter energy market could affect household and corporate earnings – what impact might this have on investment markets?

Key highlights

• What’s next in the U.S.-Iran war? Markets’ anticipation for a reopening of the Strait of Hormuz fell to 34% last week. The implications of a further five weeks of disruption are stark, causing additional tightening in the energy markets.
• Firms predict price rises: The Bank of England (BoE)’s Decision Maker Panel expects companies to raise prices by 4.4% over the next year and for inflation to reach 4% – double the BoE’s target.
• U.S. corporate earnings results: With about a quarter of companies having reported, aggregate earnings are coming in around 10% above expectations, producing a blended year-over-year growth rate of 14.4%.

The Iran war: Brinkmanship, blockades and fragile progress

The geopolitical stand-off between the U.S. and Iran over the Strait of Hormuz dominated market sentiment throughout the week. Oil prices returned to above $100 per barrel and risk appetite came under pressure.

Last week opened with both sides claiming the Strait was open to traffic, only for Iran to close it again after the U.S. failed to lift its naval blockade. A vessel was seized by the Americans for attempting to violate the restrictions, marking the first such incident.

Talks were scheduled in Islamabad, Pakistan last Tuesday, but Iran initially signalled it had no plans to send negotiators. By midweek, the U.S. had chosen to maintain the blockade while extending the ceasefire without an end date – a pragmatic acknowledgement that setting another deadline it might not enforce would damage credibility.

By Thursday, Iran had formally stated it had no plans to participate in negotiations, pushing Brent crude higher once more.

This led to a fall in anticipation of the reopening of the Strait of Hormuz. At the beginning of the week, there was a 60% chance of the Strait being reopened by the end of May, according to the Polymarket prediction market. By the end of the week, that had fallen to 34%. The implications of a further five weeks of disruption are stark, causing additional tightening in the energy markets.

Notably, while crude oil prices have retraced somewhat from their peaks, the pass-through to consumer fuel prices has been asymmetric – petrol prices at the pump remain stubbornly high despite some easing in wholesale markets. Towards the back end of the week, prices were rising once more.

This is frustrating because there’s growing evidence that the UK economy was picking up before the war began. UK retail sales numbers released for March show that UK consumers have been able to dip into accumulated savings, so the war hasn’t slowed their consumption. But it won’t take long for the effects to be more pronounced as the GfK consumer confidence survey showed consumers are anxious about the economy, and business optimism fell to its lowest level since COVID-19 according to the Confederation of British Industry.

The UK isn’t alone in this. Global purchasing managers indices (PMIs) showed that businesses are slowing production and raising prices. Most countries are experiencing price increases not seen since the brief window of extraordinary inflation in 2022.

Inflation is bad for political leaders. The decline in President Donald Trump’s net approval rating has started to accelerate.

In the UK, it’s yet another challenge for UK Prime Minister Sir Keir Starmer – in addition to the difficult testimony he gave to Parliament regarding the Peter Mandelson vetting affair, and the even more difficult evidence heard from former civil servant Oly Robbins, who oversaw the process.

The combination of these factors has made gilts the worst-performing major bond market since the onset of the war.

UK inflation data released last week offered few surprises. Inflation has picked up due to energy. The combination of the survey data and PMIs caused expected interest rates to rise from a single increase in 2026 to two hikes for both the UK and Europe.

Source: Bloomberg

We’re often asked why central banks would increase interest rates when the economy is struggling due to high prices elsewhere. The answer is that if it seems like higher oil-related prices feed through into higher wages, the central bank faces a wage price spiral, which can only be broken by deliberately weakening demand – done by raising interest rates.

In April, the Bank of England’s Decision Makers Panel of firms said it expects firms to raise prices by 4.4% over the next year, and for inflation to reach 4% – double the BoE’s target. However, the BoE’s agents – who speak to businesses and gauge how they’re feeling about things – learned firms are worried about their ability to pass on price increases, which means they’re more likely to ‘absorb’ them (suffer weaker profits). If companies don’t pass on the price increases, the BoE won’t need to raise interest rates.

Corporate earnings: Strong but facing elevated expectations

Earnings season continues with quite strong numbers overall emerging from businesses.

At a time when valuation multiples have contracted (the S&P 500 12-month forward price-to-earnings ratio has declined from 22.9 to 20.1), corporate earnings have been the engine driving equity markets higher.

With about a quarter of U.S. companies having reported, aggregate earnings are coming in around 10% above expectations, producing a blended year-over-year growth rate of 14.4%. Technology has been the standout, with earnings up 46% year-over-year. Corporate balance sheets remain in good shape, with interest coverage for U.S. non-financial businesses at very high levels, leaving ample capacity for continued investment.

Companies tend to beat their short-term earnings estimates by design – they edge down their guidance to reach something achievable. But longer-term expectations are high and must be met in order to justify the current valuations. Several cyclical, sector-specific, and structural factors suggest meeting currently elevated expectations will be challenging.

The boost to the economy from lower bond yields appears to be over. Fiscal policy for advanced economies in 2026 is projected to be neither loose nor tight. U.S. jobs growth has slowed to zero – and historically, every time non-farm payroll growth has dropped to zero or below, corporate earnings have followed. Earnings recessions have occurred roughly once every four years; the last was in 2023, implying one could be due by 2027.

The main anxieties facing company earnings at the moment are around AI-related capital expenditure by hyperscalers, which has boomed. The four major hyperscalers – Microsoft, Meta (Facebook), Amazon and Alphabet (Google) – are expected to spend over $600 billion this year, up from $200 billion just two years ago. However, there are legitimate questions about what returns they are likely to make on this investment.

The relevant CEOs themselves have acknowledged they’re investing not solely for attractive returns but for survival – a dynamic reminiscent of a prisoner’s dilemma, where mutual investment compresses margins.

So, while this seems very different from the previous tech bubble because these companies are incredibly profitable at the moment, there are some genuine reasons to fear that future profitability could disappoint.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

29/04/2026

Please see the below article from Brooks Macdonald detailing their discussions on the US-Iran war and the ripple effect on markets. Received this morning 28/04/2026.

What has happened?

Two months into the Iran conflict, markets are in an uneasy stalemate. Brent crude touched $109/bbl overnight, a three-week high, after the White House signalled scepticism toward Iran’s proposal to reopen the Strait while deferring nuclear talks. Despite the backdrop, the S&P 500 and Nasdaq edged to fresh record highs, led by Nvidia.

The inflation clock is ticking

With Brent above $100/bbl for nearly a week, inflation is firmly back on the agenda. Equity markets are holding up on earnings and AI momentum, but fixed income is signalling that the longer the Strait stays closed, the harder it becomes for central banks to ease. Treasuries sold off with the 10-year yield rising to 4.34%, Gilts underperformed with the 30-year yield at a 7-month high, and the Bank of Japan held rates in a notably split 6-3 vote, raising inflation forecasts while cutting growth projections.

What does Brooks Macdonald think?

What began as an acute shock is increasingly being priced as a structural shift, oil markets are pricing extended disruption, inflation expectations are drifting higher, and the easing window is narrowing. US equity resilience is impressive but increasingly narrow, resting heavily on Mag-7 momentum which is facing its biggest test this week as Microsoft, Amazon, Meta and Alphabet all report. Disappointment on AI capex or forward guidance could remove one of the few remaining pillars supporting sentiment.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

28/04/2026

Please see the below article from Tatton Investment Management discussing resilient equity markets despite rising geopolitical, energy and interest‑rate risks, received this morning – 27/04/2026.

Resilient equity markets, rising risks

Risks have risen but stocks are little changed. Middle Eastern ceasefires have been nominally extended but the Strait of Hormuz remains closed. Both the US and Iran are conducting operations in the waterway – resulting in a tense stalemate. If Trump is right about Iranian “infighting”, negotiations will be slow. But any power struggle could easily end up with a strengthened, more hardline IRGC, making regime outcomes even less predictable. Steadily rising oil prices reflect the fact that the current stalemate isn’t economically sustainable. The risk to equities creeps higher the longer it remains.

Rising bond yields are another risk for equities. Ahead of this week’s rate decisions across the developed world, interest rate expectations rose last week. However, this was more about robust global growth signals than energy prices per se. The UK is case in point: commentary focusses on higher input costs, but UK business confidence is proving resilient. The Bank of England will probably have to pivot tighter, but that’s because growth looks stronger. Global growth looks resilient, which is a challenge for long-term bonds. As the challenge comes from growth, though, it should still mean a decent outcome for equities.

Earnings growth continues to be strong too – even in Europe, where most other data looks negative. Poor European confidence numbers are probably more accurate than backwards-looking earnings, but we should keep an eye on them for more clues. Global resilience puts markets back to where they were last summer: panic about policy (tariffs then, war now) but with earnings still ticking along.

Other risks are receding too. Kevin Warsh will become Federal Reserve Chair after the US Department of Justice dropped its probe into current chair Powell – helping bond yields fall. Warsh dismissed claims he would take monetary policy cues from Trump last week. Even if the president does something market-moving this weekend, history tells us that the economy can ignore the noise.

Business sentiment holds strong

April’s flash PMIs (purchasing managers’ indices, measuring business sentiment) were surprisingly strong, proving companies are resilient to the energy shock. The US (52), UK (52) and Japan (52.4) reported expansion, while the Eurozone (48.6) was the only disappointment. This strength was driven by manufacturers riding a wave of investment – defence spending in Europe and AI capex in the US. It’s a reversal of last year, when global growth was powered by consumption. Public and private investment taking the impetus is good news, since this investment should be more resistant to energy prices.

UK PMIs were significantly better than expected, despite a sharp rise in reported input costs. The inflation component has led some to question the UK figures, and whether they might be revised down (as flash PMIs often are). The pessimistic view is backed up by the CBI’s business confidence numbers, which show a sharp drop in manufacturing sentiment – in contrast to the positive manufacturing PMI (from S&P). CBI surveys have suffered low response rates in recent years, so we would lean more on S&P’s data. Coverage of the UK continues to be negative, highlighting inflation and potential interest rate hikes – but we stress this is about better-than-expected growth.

Europe stands out for the wrong reasons, with a dreary 47.4 PMI for the Eurozone services sector. This data is heavily focussed on French and German companies, and we’ve known for a while that Europe’s two largest economies are its weakest. Periphery growth is better, but not captured by the PMI. We should also note that manufacturing was stronger than expected – proving that defence spending is working. It’s not enough to counteract the oil shock right now, but it’s still a good sign. European confidence is understandably weak but, if the Iran war is resolved, there is enough momentum to get growth back on track.

Europe gets a Magyar boost

Viktor Orbán’s historic election loss could be a turning point for Europe. Incoming Prime Minister Péter Magyar wants to repair Hungary’s relationship with Europe and markets approve: the forint climbed against the euro and Hungarian stocks shot up, in the hope that Magyar will unlock €17bn in EU funds frozen over rule of law concerns.

The broader reaction for Europe was more muted. The euro gained a little after the election and European stocks rose, but that was more about easing Iran tensions. Investors took Orbán’s departure as a mild positive for Europe, without overreacting.

It is a clear benefit for Hungarian equities, which trade at lower price-to-earnings valuations than Polish and Czech peers after decades of corruption and economic stagnation. The cautious reaction for broader Europe makes sense too, since significant barriers to European integration remain (pro-Russian Rumen Radev just won Bulgaria’s snap election). Orbán has repeatedly obstructed European integration over the years but he’s far from the only obstruction. Even the core EU nations regularly disagree – exemplified by Chancellor Merz’s attack on UniCredit for its attempted takeover of Commerzbank. These disagreements have been a barrier to the all-important Savings and Investment Union.

Magyar’s victory is still symbolic for wider Europe. The $90bn of aid to Ukraine, now likely to be approved, could pave the way for alignment in defence spending and other areas – with downstream effects on growth. That’s why the unanimity requirement in EU foreign policy is still an economic issue. Orbán’s departure is not straightforwardly about right-versus-left politics; Magyar himself is a former Fidesz member. Rather, it shows that the specific brand of obstructive anti-European populism is less viable. Europe’s populists will likely be inclined to take the more conciliatory approach of Italy’s Meloni from here. That will lead to incremental improvements for European integration. Over time, these make a big difference.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

27^th April 2026

Please see below, an article from EPIC Investment Partners discussing investment opportunities in Colombia. Received today – 24/04/2026

Colombia has been a difficult country to like, but a profitable one to own. At the end of March, the Republic’s 3.875 per cent dollar bond due in 2061 traded at 56.58 cents on the dollar. Less than four weeks later, the Ministry of Finance cleared the same bond in a cash tender at 64.875. That was more than eight points of capital appreciation in under a month, on a credit many investors had good reason to avoid.

The tender is useful, but it is not the main story. It showed that Colombia’s debt had become too cheap, even for Colombia itself to ignore. The more important question now is political. The first round of the presidential election is due on 31 May. Gustavo Petro cannot run again, but the vote is still a referendum on whether his project survives him.

That matters for bondholders. Petro did not create all of Colombia’s fiscal problems, but he has made them harder to overlook. The deficit remains large. Inflation is sticky. The central bank has been pulled into open confrontation with the executive. Energy policy has pushed Ecopetrol to look abroad for growth rather than commit more heavily at home. Relations with Ecuador have also deteriorated.

Iván Cepeda, the candidate of the left, would represent continuity with Petro’s Pacto Histórico. He is more diplomatic and less erratic than Petro, but markets would still read his victory as a slower repair of fiscal credibility, a more interventionist state and less immediate relief for the energy sector. The left has not collapsed; its congressional performance showed that Petro’s base remains mobilised.

Even so, the rightward shift is visible. Paloma Valencia’s March primary victory, with more than 3mn votes, gave the centre-right a candidate with momentum and organisation. Her choice of Juan Daniel Oviedo, the former head of the national statistics agency, as running mate adds a technocratic edge. That does not guarantee reform. Congress will remain fragmented and voters may want change without austerity. But it points towards more respect for the central bank, private investment and a pragmatic approach to energy.

Abelardo de la Espriella offers a more volatile version of the same correction. His appeal rests on security, lower taxes and rejection of Petro’s “Total Peace” strategy, which critics argue has allowed armed groups to consolidate. His style is not obviously reassuring, but his platform speaks directly to investor concerns over security, hydrocarbons and the state’s capacity to govern.

Colombia is not a pristine credit. The fiscal deficit is too large, policy credibility has been damaged, and the hydrocarbons policy is self-defeating. But none of this automatically creates an external solvency crisis. The maturity profile is manageable, the current account deficit is funded and reserves are not collapsing. Colombia remains messy, but serviceable.

That is why the bond story has changed. In March, the case was valuation. In April, the tender helped prove the point. By May, the question is political mean reversion. Fixed income does not require perfection. It requires compensation. Colombia still offers a spread, a discount bond, a tender precedent and an election that could shift policy back towards the centre-right.

For the past year, investors in Colombia have been paid to worry. They may now be paid to wait.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

24^th April 2026

Please see the below article from EPIC Investment Partners discussing how Middle East disruption is impacting time‑sensitive medical isotope supply chains and global healthcare delivery, received this morning – 23/04/2026.

Half-Life Crisis

While markets remain transfixed by oil routes, shipping lanes, and headline commodities, a more time sensitive supply shock may be unfolding in global healthcare. Conflict in the Middle East region is not only disrupting trade flows and energy markets; it is exposing a structural vulnerability in nuclear medicine, where value is governed by time as much as chemistry. Unlike conventional pharmaceuticals that can be stored, buffered, and shipped over weeks, many medical isotopes used in imaging and cancer therapy have half-lives measured in hours or days. In this system, delay does not simply reduce efficiency, it can erase clinical usefulness altogether.

That distinction is critical. Isotopes such as Technetium-99m, widely used in diagnostic imaging, and Lutetium-177, increasingly important in targeted radiotherapy, depend on tightly synchronised production and delivery chains. From reactor output and radio labelling to air freight, customs clearance, and hospital scheduling, every stage must align with the physics of radioactive decay. Even short delays can materially reduce potency; longer disruptions can render entire consignments unusable. These are not traditional pharmaceuticals; they are perishable assets.

Over the past two decades, parts of the Middle East, including Israel, Turkey, and Egypt, have also become important nodes in global clinical research infrastructure. Their role has been shaped by advanced hospital systems, experienced investigators, strong digital health records, and access to diverse patient populations. According to recent data from Phesi, approximately 6.7% of active global clinical trials, more than 4,300 studies, have been affected by recent regional disruption, with close to 8,000 investigator sites impacted.

The consequences are already emerging in the form of rising procurement costs and tighter hospital scheduling for time sensitive radio-pharmaceuticals. Oncology focused clinical trials, which rely heavily on consistent imaging, diagnostics, and specialist treatment centres, may also face delays or protocol adjustments. The impact is uneven, but it compounds over time, affecting both healthcare delivery and the pace of drug development.

Against this backdrop, Gulf investment in nuclear, research, and healthcare infrastructure is increasingly relevant. The UAE and Saudi Arabia are expanding capabilities that could support more localised radio pharmacy, isotope handling, and specialist medical manufacturing. While still developing, these efforts reflect a broader shift toward reducing dependence on long, fragile supply chains.

The broader lesson is straightforward: modern healthcare depends not only on scientific progress, but on timing. When conflict disrupts the routes between production and patient, the cost is measured in something far more finite than money, usable time.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

23^rd April 2026

Please see the below article from Brewin Dolphin detailing their discussions on US-Iran negotiations, US inflation jumps and UK growth. Received yesterday afternoon 21/04/2026.

Blockades to breakthroughs

The Middle East conflict remained the focus last week. Following the breakdown of U.S.-Iran negotiations, last week the U.S. imposed a naval blockade on Iranian ports and coastal areas. This represented a shift in strategy from the previously threatened strikes on domestic Iranian energy infrastructure. This pivot was reportedly driven by U.S. Central Command’s concerns over the depletion of munitions stocks required to sustain a prolonged bombing campaign.

The blockade’s practical enforcement was tested early in the week, with markets closely watching the passage of the Rich Starry – a Chinese-owned, Malawian-flagged vessel previously blacklisted for sanctions violations through the Strait of Hormuz. The ship ultimately turned back, suggesting the blockade is, for the time being, holding. Tanker traffic through the Strait has effectively been curtailed.

The geopolitical calculus remains complex. Helima Croft of RBC Capital Markets cautioned against assuming China would pressure Iran toward a deal. She noted that Beijing has amassed significant energy stockpiles and may view the redeployment of U.S. military assets away from Asia – and the running down of American missile inventories – as a net strategic benefit. On the other hand, the blockade imposes real economic costs to the Chinese energy supply, which doesn’t improve the already strained bilateral relationship between Washington and Beijing.

By mid-week, however, sentiment shifted materially. President Donald Trump indicated that Iran had reached out to resume peace negotiations, with reports suggesting face-to-face talks would occur before the current ceasefire expires next week.

Over the last week, negotiations have continued on a number of official and unofficial fronts. Specific parameters related to Iran’s nuclear programme remain contentious, but as both parties are evidently able to restrict access to the Strait of Hormuz, it becomes harder for either one to use that as leverage. Over the weekend, the Strait appeared to have been reopened by Iran, but it was closed again as the U.S. failed to lift the blockade. These developments serve as a reason for optimism regarding a mutually beneficial agreement potentially being reached this week.

The market reaction to these developments was notably restrained throughout the week. Equity volatility indices fell back to levels consistent with those prevailing before the conflict’s onset, and an increasing number of global indices moved into positive territory relative to the start of hostilities.

Brent crude, while still elevated at approximately $94 per barrel, eased from its highs as the prospect of a diplomatic resolution introduced fresh supply expectations.

There’s no question that markets appear complacent considering the significant economic risks that remain. It seems likely that the market reaction has more to do with the continued flow of new funds into markets, driven mainly by employment compensation, than with an appraisal of the earning potential of most companies.

The weekly employment data released, which runs up to 11 April, showed that there has been no discernible increase in job losses since the conflict began. While employment remains reasonably strong, pension contributions will continue to push stocks higher.

Companies that had stopped buybacks ahead of their earnings releases will be able to return to the market once they’ve reported, which will likely provide additional support for the markets. The earnings season properly began last week and will step up this week.

The main concern for investors has been the risk of inflation. It detracts from growth and increases potential interest rates.

In the U.S., CPI data for March has shown an acceleration in headline inflation, jumping to 3.3% year-on-year. Unsurprisingly, the primary driver was a spike of over 20% month-on-month in the energy commodity category. This represents the largest increase in the history of the data series, which extends back to the late 1950s. There were early signs of energy cost pass-through, most visibly in airfares, but critically, there has been no evidence yet of broad-based contagion.

The conflict isn’t the only factor affecting inflation. AI, for example, is both disinflationary and inflationary. While there’s an expectation that AI will suppress ‘white collar’ wages and, thus, services inflation, AI-related demand has driven computer memory prices up over 2,000% in the past year and therefore maintained upward pressure on tech hardware prices.

What will the implications of this be for Federal Reserve (the Fed) policy? Markets are now pricing in the possibility of a single cut in the Fed funds rate through year-end. With inflation accelerating from an already elevated level, and having missed its target for an extended period, the Fed will require clear, sustained evidence of economic weakening before cutting rates.

Two factors will be decisive.

First, the consumer: spending growth has held up at 2.5% year-on-year, but income growth has weakened to just 1%, pushing the savings rate down to a historically low 4%.

Bank of America deposit data reveals a stark K-shaped divergence – higher earners are seeing wage growth near 6%, while lower earners are at approximately 1%. Given that lower income households have a higher marginal propensity to spend, this divergence represents a meaningful risk to the consumption outlook.

Second, inflation expectations: market-based measures, such as five-year forward expectations, remain well-anchored, and survey-based measures show only a modest uptick – nothing alarming thus far.

UK Growth remains resilient, but headwinds are gathering

UK monthly GDP data for February came in surprisingly strong at 0.5% monthon-month, reflecting an improvement in household confidence following the widely feared Autumn Budget.

However, this pace isn’t considered sustainable, and the data pre-dates the onset of the Middle East conflict. Purchasing Managers Indices (PMI) readings have already softened, and elevated energy costs are expected to take the sting out of the year’s strong start.

The government announced a £600 million package of deferred costs for manufacturing businesses to help manage higher input cost inflation – a modest but directionally positive measure.

UK wage growth remains stubbornly above levels consistent with the Bank of England’s 2% target, effectively ruling out near-term rate cuts. Markets now expect one to two rate hikes by year-end, and gilt yields have risen accordingly. Sterling has maintained a firm footing near $1.35, supported by the expectation of sustained higher rates.

Political risk has also entered the frame. The revelation that former U.S. ambassador Peter Mandelson failed the vetting process has placed additional pressure on Prime Minister Sir Keir Starmer. Prediction markets are now seeing the probability of Sir Keir’s departure by year-end jump from approximately 40% to 55–60%. This uncertainty contributed to gilts underperforming other European sovereign bonds.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

22/04/2026

Please see the below article from Brooks Macdonald detailing their discussions on markets, received this morning, 21/04/2026:

What has happened?

Markets retreated on Monday as the weekend’s lack of progress on US-Iran talks sent Brent crude up 5.64% after Trump warned he would not reopen the Strait of Hormuz until a deal was signed. The Nasdaq ended a 13-day winning streak, its longest since 1992. This morning sentiment has improved on reports that both sides are sending delegations to Islamabad ahead of the ceasefire’s expiry on Wednesday, with US futures recovering most of Monday’s losses and Polymarket’s implied probability of Hormuz normalisation by end of May rising to 69%.

Who will lead the Federal Reserve?

Today also brings the Senate Banking Committee nomination hearing for Kevin Warsh as the next Fed Chair. Warsh has emphasised that monetary policy independence is “essential” while noting the Fed must earn it by staying within its mandate, a careful balance ahead of questions on the near-term rate path. Republican Senator Thom Tillis has threatened to block all Fed appointments until the DOJ probe into Powell concludes, and with only a 13-11 Republican majority on the committee, his vote could prove pivotal.

What does Brooks Macdonald think?

Wednesday’s ceasefire expiry is a clear binary, a deal or extension would likely extend the risk rally and push oil lower, while a breakdown could quickly reverse recent gains. The Warsh hearing adds a further layer of uncertainty, and with inflation expectations already edging higher on both sides of the Atlantic, we continue to favour diversified positioning and are watching the geopolitical and policy newsflow closely.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Andrew Lloyd

21/04/2026

Please see the below article from Tatton Investment Management, discussing market reactions to the Iran conflict, improving liquidity, resilient growth, and emerging inflation risks, received this morning – 20/04/2026.

Getting back on track
Last week ended with what can only be described as market euphoria, after Iran declared the Strait of Hormuz “completely open”. Markets effectively decided the war to be over (even before Iran’s declaration), with the exception of oil perhaps: one-year Brent crude futures still traded above $75pb, implying longer inflation and a bigger growth hit than markets are pricing in. Even that assumed that de-escalation continued. Many rightly remained sceptical and sure enough, the conflicts re-escalation over the weekend quickly reversed most of the oil price decline.

The recovery from last year’s “Liberation Day” proved the risk of investors getting too negative, which helps explain current positivity, as do improving liquidity conditions with the Fed now a net bond purchaser. If the war had happened when liquidity was tight last Autumn, market reaction would have been worse. Liquidity is improving too: both the dollar and short-term yields fell. It’s no surprise that market sentiment on Iran shifted after central banks dialled back their hawkish rhetoric.

Liquidity allows investors to focus on the positives, and there’s plenty. US Q1 earnings look good, proving that consumers are still spending. The US economy in aggregate is insulated from higher energy prices, as they result in an internal money flow to US oil producers, rather than an outflow. UK growth (from before the Iran war) came in higher than expected, showing Britain started the war in a decent place.

It’s a little odd that during Friday’s euphoria the dollar dropped, and the renminbi gained, despite strong US growth and sluggish Chinese growth. Energy relief helped the euro gain, but we suspect Viktor Orbán’s loss in Hungary played a role too. The departure of the EU’s saboteur-in-chief mean less disruptive European politics. Markets think the same for the world.

Strong bank earnings show no credit contagion
US banks posted strong earnings growth in Q1 2026 (Morgan Stanley +30%, Citigroup +42%, JPMorgan +13%). That shows US consumers are spending despite gas price worries. Geopolitical shocks actually boosted trading profits too, helping Morgan Stanley in particular. Executives expressed concerns about inflation and the hit to growth from higher energy prices, though. Wells Fargo highlighted a split in consumer spending, continuing the “K-shaped economy” theme. JPM noted that corporate activity could stall thanks to geopolitical uncertainty. Bank stocks rallied on the strong results – but actually underperformed non-financials last week.

That’s partly because of the private credit (PC) elephant in the room. Fears of 2008-style contagion have grown after PC funds halted redemptions. The FT wrote last month that distorted EBITDA metrics might be making PC leverage ratios look better than they are – and some fear that firms might be hiding debts off balance sheet altogether. But the bank reports all said PC isn’t a systemic problem, even the PC-critical JPM boss Jamie Dimon. The PC market is a fraction of public debt markets, and the loans are structured so that PC firms and investors take the hit, rather than banks.

We’ve long argued that PC’s inability to create money, like banks can, prevents it causing another 2008. PC losses hurt PC investors, but the house of cards only comes down when bank money, backed by deposits, gets destroyed. Of course, banks have lent to PC firms (JPM’s exposure is $50bn, Wells Fargo $36.2bn, Citi $22bn) but these exposures are structured so that PC firms take the hit, and banks only lose if defaults spiral. Banks have also increased loan loss provisions – a healthy sign of money being stored away to protect against systemic issues. It’s not all fine in PC, but nothing in the latest reports vindicates the doomsayers.

Iran war a problem for food prices
The Iran war is pushing up food prices, according to the UN Food and Agriculture Organization (FAO). Global food prices rose 2.4% in March, with higher energy prices impacting all subcategories of the FAO’s index. Food prices declined in late 2025, and we started this year with decent supplies. That’s why soft commodity futures haven’t reacted as sharply to the Iran war as oil or gas. If Iran declaring the Strait of Hormuz “completely open” is really the end, there should be enough food supplies to last until production returns to normal. If talks fail and the Strait shuts again, though, time will not be on our side.

The biggest problem is fertiliser, 30% of which transits through the Strait of Hormuz. Fertiliser prices were already high before the war and have shot up, blindsiding farmers ahead of the spring planting season. Even if the Strait stays open, it will take months for production and shipping to return to normal levels – keeping food inflation high until next year at least. The UN has warned about potential humanitarian crises from this, particularly in sub-Saharan Africa, which imports 90% of its fertiliser.

Higher food prices will hurt consumers but are unlikely to create a wage-price spiral (given recent labour market softness). Currently, businesses want to pass on higher costs but are struggling to do so and that’s probably why markets aren’t as worried about food as about energy. Supposedly ‘one-off’ price shocks did create an inflation spiral after the pandemic, but that was exacerbated by central bank easing. In contrast, monetary policy has remained restrictive in 2026, and central banks seem to be warning governments against spending through the cost shock. This is why markets aren’t worried – but that’s no comfort to consumers. They desperately need the Strait of Hormuz to stay open.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

20^th April 2026

Please see below, an article from EPIC Investment Partners which discusses the possible effects of the US-Iran conflict on the long-term strength of the US Dollar. Received today – 17/04/2026

Even if the US-Iran ceasefire holds, the dollar will not emerge from this episode untouched. Diplomats are still trying to turn the truce into something more durable, but no date has yet been fixed for a second round of talks, while Washington continues to mix negotiation with sanctions pressure and military threats. Israel and Lebanon now have their own separate ceasefire, a reminder that the region’s conflicts overlap rather than resolve in neat sequence. The immediate panic around the Strait of Hormuz may fade. The wider lesson will not.

For years, predictions of the dollar’s decline have run ahead of events. The reason was simple: no other currency offered the same combination of liquidity, legal protection and market depth. There were plenty of complaints about American sanctions, fiscal looseness, and financial power. But oil supplies could be disrupted while money still moved through dollar channels. The dollar endured not because it was beyond criticism, but because there was nowhere else to go.

That is why Hormuz matters for more than crude. The point is not that a few cargoes settled outside the dollar would overturn the system. It is that a conflict over a trade route has become bound up with a broader question about settlement, sanctions, and the extent to which countries can reduce their dependence on the western financial system.

Iran offers a useful example. Its oil trade with China has for years relied at least in part on yuan and other non-dollar arrangements, largely because sanctions left Tehran with few conventional options. What has changed is not the existence of those workarounds, but the context around them. China is now by far the main buyer of Iranian oil, taking more than 80 per cent of its shipped crude last year. In that setting, renminbi settlement no longer looks like a niche sanctions dodge. It starts to look like part of a wider shift in how politically sensitive trade is financed.

That does not make the renminbi a true successor to the dollar. China still has capital controls, limited convertibility and financial markets that lack the openness behind reserve-currency dominance. In a real crisis, investors still run into dollars. The Treasury market remains in a class of its own.

But that is not quite the point. If a country wants to reduce its reliance on the dollar without stepping outside global trade altogether, what realistic state-backed alternative does it have? The euro has scale, but not the same strategic freedom. Gold is not a payments system. Crypto offers workarounds, but not sovereign depth. On that basis, the renminbi is increasingly the only alternative with enough weight to matter.

The contradiction is plain. Washington wants the dollar to remain central not just to the existing financial system, but to newer forms of finance as well, while continuing to use access to that system as a tool of pressure. The talks with Iran are a case in point: diplomacy on one side, sanctions, and naval pressure on the other. That may strengthen America’s hand today. It also gives others a clearer reason to route around it.

The likely outcome is not a neat handover from one reserve currency to another. It is a more fragmented system, in which the dollar remains dominant but less universal, while renminbi-based channels take a larger share of politically sensitive trade. Oil has already eased on hopes that talks may resume and the war may cool. Markets may move on. But the dollar’s aura of inevitability has taken another knock.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

17^th April 2026

Please see todays Daily Update from EPIC Investment Partners received this morning (16/04/2026):

For much of the past decade, the $24 billion LAPSSET corridor, linking Lamu Port to South Sudan and Ethiopia, was widely dismissed as an overambitious “white elephant,” long on vision but short on relevance. That perception has shifted decisively. What once looked like a speculative infrastructure bet has become a strategic hedge against mounting instability across traditional Middle Eastern shipping lanes.

Recent disruptions have forced a rethink of global logistics. As security risks and insurance costs surge across key maritime chokepoints shipping lines are actively seeking alternatives. Lamu, positioned outside the immediate volatility of the Red Sea and Strait of Hormuz, has emerged as an unlikely but critical beneficiary. Cargo throughput has surged dramatically, with major carriers rerouting shipments that would historically have passed through Gulf hubs. The shift is not marginal, it is systemic.

This is best understood as a form of “asset displacement.” When established routes become constrained, global trade flows do not stop, they adapt. Underutilised infrastructure in more stable geographies suddenly commands a premium. Lamu’s appeal lies not just in geography, but in capability. Its deep-water berths, reaching 18 meters, allow it to accommodate large, modern vessels that many regional ports cannot handle. Combined with aggressive incentives, discounted handling fees and extended storage terms, it has quickly become a viable transshipment hub rather than a fallback option.

The numbers reinforce the narrative. Vessel traffic has accelerated sharply in early 2026, while cargo volumes have increased nearly tenfold over the past year. Large scale diversions, including vehicle carriers rerouted from Gulf destinations, underscore how quickly supply chains can reconfigure when risk thresholds are breached.

Crucially, this maritime shift is being reinforced inland. The LAPSSET corridor’s land bridge, linking Kenya to Ethiopia’s vast consumer base, is gaining credibility as security coordination improves along key routes. This creates a more resilient, integrated alternative to strained sea lanes.

None of this signals a permanent displacement of Gulf logistics, which remain central to global trade. Rather, it marks a structural rebalancing. The era of relying on a narrow set of chokepoints is giving way to a more diversified system.

Amid the current environment, the most valuable attribute in global trade is not speed, but reliability, specifically, insurability. Lamu’s transformation reflects that shift. What was once a costly gamble is now functioning as a strategic “Plan B,” quietly redrawing the map of global trade flows along the East African coast.

Please continue to check our blog content for advice, planning issues, and the latest investment, market and economic updates from leading investment houses.

Andrew Lloyd

16/04/2026