Geopolitical Impact on Fixed Income (with Francine Lacqua)

explicit

NDX

RUT

explicit

Metals

USD

PGIM 7.8
Asset Manager $1400.00B
Catherine Neiss 7.5

Geopolitical Impact on Fixed Income (with Francine Lacqua)

wti

to the extent that this news does mean that the margin increased oil supply on global markets, lower energy prices

yields

raising defense and security issues within Europe that could sort of push up long and yields Geopolitical uncertainty and potential for increased risk premium could push yields higher.

1/5/2026 10:58:21 PM	medium term up	20 days later	+0.81%	+0.81%
12/4/2025 5:57:16 AM	medium term up	21 days later	-0.07%	-0.07%

Markets largely looking through Venezuela news; little movement on oil; unclear if markets don't know how to price or if fundamentals unchanged.

Francine Lacqua
Catherine Neiss

Early days; initially thought increased oil supply would lower energy prices but also demonstrates norm-breaking that could raise risk premium further out.

Expected more steepening curve trend; lack of reaction may be due to limited EU-Venezuela connectivity.
Catherine Neiss

Lower energy prices could push down near-term inflation but raise defense/security issues in Europe pushing up long-end yields.
Does geopolitics change 2026 muddle-through outlook for Europe?

Francine Lacqua
Catherine Neiss

Venezuela development unexpected/dramatic; Europe experiences spillover/aftershocks; 2026 could be nothing year for Europe; 2027 more consequential with elections and EU budget framework.

Europe has limited role driving agenda.
US telling China to back off Venezuela oil; does this risk going back to trade policy and inflation risks? Markets looked through 2025 tariffs.

Francine Lacqua
Catherine Neiss

US tariff inflationary impact still unknown due to data lags; earliest effect likely Q4 2025, extended through 2026. In Europe, tariffs are deflationary due to Chinese goods competition.

Lower energy prices would magnify downside inflation risk in Europe, creating divergence with US.
Which fixed income space looks more vulnerable?

Francine Lacqua
Catherine Neiss

Comes back to risk premium point; long-term estimates still compressed; layering on new developments suggests scope for bigger increase in long-end term premium.

Potential for further developments we can't even imagine.

SignalTube

markets at a glance