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Metrobank US-Iran Risk Index: Dangerous waters
Continued attacks on Gulf oil shipments have kept markets on edge
By Metrobank Research, Investment Counselor Department
Our US-Iran Risk Index settled at 126.7 on March 11, 2026, 3.3% higher than the previous day.
Even as the International Energy Agency prepares to release a record 400 million barrels of oil to address the ongoing oil crisis, inflationary fears were stoked as attacks on Middle East oil shipments intensified.
This was exacerbated by a statement from Iran’s military spokesperson Ebrahim Zolfaqari, who said that markets should “[get] ready for oil to be USD 200 a barrel, because the oil price depends on regional security, which [the US has] destabilized”, according to a Reuters article.
Our risk index rose as a result of markets pricing in these heightened inflationary risks. Brent crude prices settled higher at USD 92 per barrel on Wednesday, and will likely sustain its upward trajectory. The 10-year US Treasury yield also rose on sustained price rise expectations. Meanwhile, the US dollar saw increased safe haven flows on heightened risk aversion, resulting in the dollar index rising above the 99-level.
Metrobank Research’s US-Iran Risk Index measures the amount of risk that the ongoing conflict presents to financial markets. It considers the general risk sentiment of investors and inflationary pressures brought on by the conflict. A value of 100 denotes a normal level of risk based on market levels prior to the conflict’s escalation, while values greater than 100 imply increasing levels of risk.
What now?
| Asset Class | Outlook | Strategy |
|---|---|---|
| Local Fixed Income | Bearish | Stay defensive on duration and focus on short‑to‑belly tenors with good liquidity. Add positions only during yield spikes or market dislocations. Avoid aggressive moves until geopolitical risk premiums ease. |
| Local Equities | Bearish | Expect bargain-hunting of cheaper names in the near term. However, gains may remain capped amid oil volatility and developments in the Middle East. Buy on dips and take profit in rallies. |
| Global Fixed Income | Bearish | Position in short-dated (up to 5 years) quality bonds as inflation fears push yields upwards. Expect volatile swings as headlines drive market sentiment amid uncertainty. |
| Global Equities | Neutral | Maintain a defensive approach by prioritizing high dividend sectors while taking advantage of volatility to accumulate select quality-growth names. |
| USD/PHP | Bullish | Buy US dollars on dips or close to support levels at 59.40 and 59.00. Oil prices and safe-haven flows will pressure the peso, though positive news that affect local and global inflation expectations offer potential relief. |
| G10 Currencies / US Dollar | Bearish | The latest bout of volatility has validated the US dollar’s safe-haven status yet again. Continued conflict will favor the US dollar, but G10 currencies will recover once risk sentiment improves. Domestic factors will determine the scale of impact on FX rates. |
| Gold | Bullish | While initially reaching highs of USD 5,400 per troy ounce on safe-haven demand, gold has pared gains after higher oil prices sparked expectations of higher US inflation, delayed US Fed rate cuts, and a stronger US dollar. Still, the precious metal continues to be supported at the USD 5,000 / USD 5,100 level. Our long-term view is steady price appreciation as global central banks purchase gold to diversify reserves beyond the US dollar and US Treasuries. |
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)