The US-Iran MOU drastically reduces probability of full war, allowing central banks to breathe. Oil decline lets inflation pass-through abate, reducing need for further hikes.

Central banks facing stagflationary shock now have relief. Those already hiking have less reason to continue; those yet to hike may avoid it entirely.

Bond rally is justified. Markets still price 30-35bp of rate hikes across Fed, BOE, ECB. For Fed, the deal gives new chair room to avoid hiking. BOE had priced cuts before; their removal is tightening. ECB likely hikes again in September.

In US and UK, we think markets are pricing too much tightening.

Fed will not rock the boat, deliver balanced statement, remove easing bias, nod to worsening inflation and better employment, but also nod to US-Iran deal. May not contribute much to dot plot. Neutral bias, wait-and-see mode.

He's been a critic of forward guidance. Makes sense to wait for deal impacts and oil trajectory.

Negative on USD long-term due to: interest rate differentials too high and should come down, negative US fiscal dynamics, policy uncertainty (tariffs). Positive risk sentiment should lift EM, benefiting from dollar weakness.

Short bias more towards EM, somewhat towards DM.