Since the end of February, global credit markets have been driven by the escalation of the US-Iran conflict and rising tensions across the Middle East. While geopolitical risks are not new, the intensity and speed of this episode took markets by surprise.

Since late February, global markets have been shaped by renewed geopolitical tensions in the Middle East, triggering a sharp increase in oil prices and reigniting inflation concerns.

The war in Iran and signs of a diplomatic solution will remain investors top focus.

If you ask a fixed income investor to describe the credit cycle, most will readily cite its four familiar phases: Repair, Recovery, Expansion and Downturn. Knowing the terminology is straightforward. The more relevant question is: why does it matter for portfolio outcomes?

Investors will look forward to the outcome of the ongoing peace negotiations.

As the war in Iran has entered its fourth week, investor attention will remain firmly on the Strait of Hormuz and its implications for global energy flows.

Global macro conditions remained broadly constructive in February, although the backdrop was increasingly shaped by policy uncertainty and a more uneven regional growth mix.

Market dynamics continue to be dominated by geopolitical developments and the evolution of the conflict in the Middle East, primarily via its impact on oil prices.