CBs are a sideshow. The macro driver is a sequence of supply shocks (energy premium, supply chain re-shoring) creating structural inflation that policy can't fix. This makes short duration the primary trade. Equities remain resilient on strong balance sheets, insulating them from rates for now. Play the theme via hard assets & value > growth. Key risk to the AI secular trade: China commoditizing memory chips, crushing margins.

Strait of Hormuz closure is the key tail risk for European energy. GS models show jet fuel inventories collapsing to <10 days by end-of-summer, necessitating a 15% flight reduction in autumn. The UK is the epicenter of this crisis due to structural vulnerabilities (refinery closures, import reliance). Airfares must rise 25-50% to even begin denting demand before rationing. This is a pure supply shock, bullish WTI/Brent and bearish bonds as inflation expectations re-price.

The post-summit geopolitical risk repricing is here. The US is done playing nice on the Strait, and equities are now catching up to the bond market's risk-off move. Expect a sharp, 2-week selloff with dramatic headlines; this is not the dip to buy. The secular AI capex bubble is not broken, and new highs are likely later this year. The next real threat isn't yields, but an earnings rug pull from overhyped AI names next quarter. NVDA earnings are a sideshow.

ECM faces a critical test from the bond selloff, but the narrative has shifted. Capital raises are now for growth, not survival, focusing on secular themes like defense, energy, & infra. Investor appetite for long-term capital in European defense is strong. While a SpaceX IPO will drain liquidity, quality European deals with clear use of proceeds can still price. The market is becoming more selective, rewarding strategic growth over survival.

Geopolitics (Iran) pushing UK 10yr yields >10% is forcing a major CRE repricing. The trade is stark bifurcation: long prime/ESG offices, healthcare, data centers, & 'living' assets vs. short secondary offices & legacy retail. The key constraint in the crowded data center space is power, not capital. Foreign capital flows (JP, US, AU) remain surprisingly robust, providing a valuation floor despite macro headwinds.