Iran / regional war risk driving oil volatility, yields, inflation, gold and policy uncertainty
Key Questions
Why did oil prices post their worst quarter since 2020?
Oil collapsed 38% in Q2 as Persian Gulf flows recovered and US output reached record levels, unwinding the geopolitical risk premium. This decline has provided a temporary disinflationary signal that eased near-term Fed rate-hike pressure.
How has the oil collapse affected gold prices and safe-haven demand?
Gold has held near $4,000 with persistent safe-haven demand despite the oil drop. The move reflects ongoing uncertainty around regional war risks and policy.
What are the implications for Fed rate-hike odds following the June jobs miss?
The jobs miss reduced near-term rate-hike odds to around 30% for July while September odds remain at 60-80%. Demand-side concerns and recession risks are now more prominent alongside the disinflationary oil signal.
Oil posts worst quarter since 2020, collapsing 38% in Q2 as Persian Gulf flows recover and US output hits record, unwinding geopolitical risk premium. Gold holds near $4,000. Disinflationary signal reduces near-term Fed pressure but demand-side concerns remain. Credit card severe delinquencies 13.1% (highest since 2011). June jobs miss further reduces near-term rate-hike pressure but raises recession risk. Commodities steady after 12% decline, contango in crude, tight product markets, gold recovery. Lower inflation risks and softer jobs data provide temporary relief but demand-side concerns persist.