James Brodie
Head of Learning & Development, Flux
Headline Confusion, Bonds Lockstep with Brent, Tesla Deliveries Decline
Hormuz crisis escalates; Iran holds leverage, energy shock spreads, inflation rises, markets volatile as growth fears mount.
Headlines overnight ranging from US deploying troops to Iran, to a 1-month ceasefire for peace talks.
Meanwhile Iran now refuses to back down and every day the Straits of Hormuz are closed the energy crisis escalates in Asia and slowly spreads west. The economic shock currently unfolding is far bigger than people realise, it’s growing every day and even with a resolution with will take months to get energy supply back online and far longer for full LNG and helium production.
If talks do happen, Iran will enter them from a position of strength. It holds leverage over the Strait of Hormuz and understands that a war of attrition doesn’t serve the U.S., whose president is looking for an exit and has limited good options. Iran also does endless wars.
Bonds move lockstep with Brent (Chart 1, Brent vs US 2-year yield, Bloomberg 3-day chart). US OIS prices 4bp hike by year end (changes by the minute) and 61bp hikes in the UK. Before global growth collapses and aggressive cuts follow.
Copper has bottomed for now, with precious metals also bouncing as the dollar finally turns lower (Chart 2, Bloomberg)
The dollar turns lower, unable to break 100.40 (Chart 3, dollar index)
Tesla, a $1.3 trillion company now has 2 consecutive years of declining deliveries. Down 9% in 2025 to 1.63 million vehicles. The steepest annual drop in the company's history. And 2026 is starting even worse - US sales down 17% in January, Europe down 44% across major markets.
Data today – German IFO business climate, UK CPI 3% as expected but going up next month, as is Australian CPI 3.7% (trimmed mean 3.3%).
The NYT reports total confusion in the White House. Trump is desperately begging for a way out of the war to save the markets.
California diesel breaks record, surpasses $7 a gallon
Russia has stopped sending out ammonia nitrate for now and will only start again after April 21.
All gas stations in Bangladesh may close due to a fuel shortage, according to the country's Gas Station Owners' Association.
Philippines has declared a state of energy emergency. The Philippines imports 98% of its oil from the Gulf, with gas prices up over +100% since February 28th
Slovenia just became the EU’s first to start rationing fuel, while Ireland is cutting fuel taxes.
Shell CEO: disruption to spread to Europe from Asia next month
(Chart 3, all traffic flowing thought the Staits of Hormuz: crude, LNG, chemical tankers, bulk fertilizer, container vessels….., Bloomberg, @BurggrabenH)
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