Metrobank’s US-Iran Risk Index settled at 145.8 on April 6, 0.6% higher than its value last Friday, April 3.
Global oil prices were little changed on Monday, as market players continued to weigh the closure of the Strait of Hormuz, a critical transit point for global oil shipments, and US President Donald Trump's threats on Iran to reopen it by Tuesday. Brent crude closed marginally higher at USD 109.77 per barrel, according to data compiled by Bloomberg.
Meanwhile, dollar strength was still supported by safe haven flows. Moreover, the benchmark 10-year US Treasury yield also closed slightly lower on Monday, US trading hours, with investors holding their breath as Trump’s deadline for the strait’s opening draws near.
All eyes will be on whether the US will still push through with its threats to intensify attacks on Iranian infrastructure should the Strait of Hormuz remain closed. Additionally, Trump himself has still not commented on whether the war was going to escalate or wind down during a press conference on Monday, according to NBC News. Uncertainty and risk levels in markets will still stay high as a result, as the strait's fate remains in question.
Metrobank still expects upside oil pressure, as global oil supply remains constricted. We also expect the Bangko Sentral ng Pilipinas to raise their policy interest rate this year to combat rising inflation. Lastly, we see the dollar-peso remaining elevated in the near-future, as the dollar continues to strengthen on safe-haven demand.
Metrobank’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 pressure brought 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.
