Risk-off deepens with equities down 4 days straight, caught between ME geopolitical fears & a bond market revolt. Brent >$110 on Iran threats, but headlines (Vance comments, NATO) cap upside. The real signal is the violent bond sell-off: US 30yr hits 5.2%, a 2007 high, dragging global yields. This isn't just oil inflation; it's a structural repricing of duration on fiscal excess & CB inaction. Bonds are the primary driver; equities are just reacting.

Market is complacent on Hormuz risk, discounting Trump's threats as noise. The proposed NATO naval escort plan is a non-starter: requires unanimity, faces impossible logistics (1500 vessels), & is vulnerable to modern asymmetrical warfare. This isn't the 1980s Tanker War. The US push on Iran's shadow banking network is the only credible pressure point. Geopolitical risk premium in oil is mispriced; path of least resistance is up on any escalation.

Fade the USD rally; the Fed can't out-hawk the G10 indefinitely. The structural shorts are energy importers JPY (fiscal risk) and GBP (political premium, weak data, dovish BOE). Europe is in a relatively better state, with more policy runway for the ECB vs the BOE. Long EUR/GBP is the cleanest expression of this divergence.

UST shock is priced; 30yr stabilizing >5% creates a constructive entry for FI. The real trade is EM local currency, as the dollar's safe-haven status frays & diversification beyond G3 becomes critical. Alpha is in bottom-up credit picking amid disruption—find the winners. The key emerging catalyst is China exiting deflation. A normalized China synchronizes the global cycle, forcing a complete rethink of the rates and inflation regime.