Quite optimistic in the short term, but longer-term uncertainty. A month ago, macro backdrop was positive but conflict was problematic. Now, short-term optimism makes sense because: 1) Negotiations are ongoing and haven't broken down entirely, 2) Blockade of Iranian ships cuts off Iran's economic winning point, 3) US Navy actions suggest closer to reopening the strait. Now positive on conflict dynamics but worried longer-term stagflationary impulse from war is underappreciated due to lingering supply chain problem.

Highlights shift from March view ('going to get worse before it gets better') to current more positive conflict dynamic as key reason for short-term optimism.

Upward momentum continues until either a complete breakdown of talks/material escalation OR continues further if we get a deal. Short term isn't defined but could sustain another week or two. Only after conflict resolves will longer-term implications be assessed.

Defines short-term catalyst (conflict resolution/escalation) and timeframe (another week or two).

Asia has supply chain risks despite good fundamentals. Generally, there will be upward pressure on long-end yields that will sustain, filtering through to other assets and creating steeper yield curves. The stagflation impulse magnitude is unquantified but is the focus of analysis.

Links supply chain risks (Asia) to specific market impact (long-end yields, yield curves).