Asks if anything other than reopening the Strait of Hormuz can sustainably lower oil prices, and if the market is pricing a protracted conflict.
Lizzy
Mark Anderson
Presents two scenarios: 1) Strait reopens within a month, oil returns to $70-80/bbl with minimal economic impact. 2) Oil stays above $100 for 3-6 months, impacting economic outlook and central bank actions.
Asks about upside for US equities if the Strait reopens.
Lizzy
Mark Anderson
Expects a quick rally back to pre-conflict highs for equities and bond yields back to around 4% on the US 10-year.
Asks what kind of higher yield environment he's thinking about for the rest of the year.
Anna
Mark Anderson
Market is pricing inflation spike from higher oil, leading to more hawkish ECB comments. However, sustained high oil would eventually cause demand destruction, bringing inflation down and potentially leading to rate cuts.
Asks about emerging market assets, given they've been popular but are now challenged by FX.
Anna
Mark Anderson
Parts of EM Asia are challenged as oil importers. Sees opportunity in higher-yielding, commodity-exporting EM currencies like Brazilian real, Mexican peso, South African rand.