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Metrobank US-Iran Risk Index: Renewed attacks

Faster US inflation and fresh military strikes in the Middle East will likely keep risk levels elevated in financial markets.

June 11, 2026 by Metrobank Research, Investment Counselor Department

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Metrobank’s US-Iran Risk Index settled at 125.7 on June 10, up by 1.2% from 124.2 the prior trading day.

Global oil prices rose, following threats from US President Donald Trump of a “very hard” attack on Iran if a peace deal is not reached, according to Reuters. Brent crude futures settled higher on Wednesday, UK trading, according to data compiled by Bloomberg.

The US launched multiple fresh strikes on Iran soon afterward, pushing oil prices further up in early Thursday trade. Risks remain tilted to the upside, with the ceasefire continually being breached and a deal feeling further from reach.

The US dollar index saw slight gains on Wednesday from renewed safe-haven flows. Meanwhile, the benchmark US 10-year Treasury yield rose by nearly 4 basis points (bps) after US CPI inflation was reported to have reached a 3-year high in May due to higher energy prices.

Metrobank sees elevated risk and volatility in the near-term, as the US and Iran continue attacks. Oil prices are poised to stay high, as global supply remains constricted due to the war’s impact on Middle East oil facilities. Domestic inflation is expected to exceed the Bangko Sentral ng Pilipinas (BSP)’s target this year, which will put upward pressure on Philippine bond yields.

Moreover, Metrobank forecasts continued rate hikes by the BSP this year to stem accelerating inflation. Finally, Metrobank expects the dollar-peso exchange rate to stay elevated, as dollar demand weighs on a weak peso.

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.

What now?

Asset Class	Outlook	Strategy
Local Fixed Income	Bearish	Stay defensive within an average duration of 2 to 5 years, as foreign exchange-driven volatility, upcoming bond supply, and potentially more BSP rate hikes may keep the yield curve elevated. This area of the yield curve has been trading at highs last seen in 2019, the 5-year yield still trades flat to longer-dated bonds. This week’s 3-year and 8-year bond auctions may also add upward pressure on yields should market participants start bidding defensively again.
Local Equities	Slightly Bullish	Maintain a cautiously defensive stance but with a more constructive tilt after a slower-than-expected Philippine inflation print. Favor banks and defensive high-quality names in the utilities and services sectors that may benefit from strengthening macroeconomic confidence and a more accommodative BSP policy path. Stay nimble and view pullbacks as attractive opportunities to build positions.
Global Fixed Income	Bearish	Stay cautious with duration in the near term, favoring a 2- to 5-year positioning, as resilient US labor data and accelerating inflation reinforce expectations of a higher-for-longer US Federal Reserve policy-rate stance. The recent backup in US Treasury yields, led by the front-end, suggests continued sensitivity to policy repricing, particularly in the belly of the curve. While yields are becoming more attractive at the long-end, volatility and further upside risks may limit immediate entry.
Global Equities	Slightly Bullish	Maintain a prudent allocation by focusing on sectors with stable earnings and attractive yields, while remaining selective in adding exposure to fundamentally strong growth companies amid ongoing market uncertainty. Elevated geopolitical risks continue to support energy prices through a higher risk premium, which may limit upside potential for global equities in the near term.
USD/PHP	Neutral	Maintain a neutral to mildly bullish USD stance. Expect early-week USD demand, but an upside may remain capped near 61.75, where repeated rejection and sizeable supply limit follow-through. Favor buying USD on dips toward 61.30-61.50 and fading strength near 61.70, as balanced flows, opportunistic supply, and ongoing geopolitical risks continue to support consolidation rather than a sustained breakout.
G10 Currencies / US Dollar	Bearish	Position for continued USD strength, as strong US jobs data, elevated geopolitical risks and higher oil prices create the higher-for-longer Fed policy that may be supportive of the dollar. While G10 currencies may see short-term rebounds due to positioning or risk sentiment swings, these are likely to remain corrective rather than trend-reversing, especially given persistent yield differentials. Focus on selling rallies while being mindful of volatility, as financial markets remain driven by news headlines.
Gold	Bearish	Gold continues its downtrend to a multi-month low of USD 4,024 following a spike in US inflation. With resilient US labor and continued growth, markets are strongly pricing in Fed hawkishness, dragging on precious metals in favor of Treasury yields. The near-term outlook turns bearish for gold, with entry levels at deeper supports. We adjust our recommendation to Underweight for tactical investors, and a Hold for strategic investors with opportunity for accumulation on further dips.

What now?

Category

Local Fixed Income

Outlook

Bearish

Strategy

Stay defensive within an average duration of 2 to 5 years, as foreign exchange-driven volatility, upcoming bond supply, and potentially more BSP rate hikes may keep the yield curve elevated. This area of the yield curve has been trading at highs last seen in 2019, the 5-year yield still trades flat to longer-dated bonds. This week’s 3-year and 8-year bond auctions may also add upward pressure on yields should market participants start bidding defensively again.

Category

Local Equities

Outlook

Slightly Bullish

Strategy

Maintain a cautiously defensive stance but with a more constructive tilt after a slower-than-expected Philippine inflation print. Favor banks and defensive high-quality names in the utilities and services sectors that may benefit from strengthening macroeconomic confidence and a more accommodative BSP policy path. Stay nimble and view pullbacks as attractive opportunities to build positions.

Category

Global Fixed Income

Outlook

Bearish

Strategy

Stay cautious with duration in the near term, favoring a 2- to 5-year positioning, as resilient US labor data and accelerating inflation reinforce expectations of a higher-for-longer US Federal Reserve policy-rate stance. The recent backup in US Treasury yields, led by the front-end, suggests continued sensitivity to policy repricing, particularly in the belly of the curve. While yields are becoming more attractive at the long-end, volatility and further upside risks may limit immediate entry.

Category

Global Equities

Outlook

Slightly Bullish

Strategy

Maintain a prudent allocation by focusing on sectors with stable earnings and attractive yields, while remaining selective in adding exposure to fundamentally strong growth companies amid ongoing market uncertainty. Elevated geopolitical risks continue to support energy prices through a higher risk premium, which may limit upside potential for global equities in the near term.

Category

USD/PHP

Outlook

Neutral

Strategy

Maintain a neutral to mildly bullish USD stance. Expect early-week USD demand, but an upside may remain capped near 61.75, where repeated rejection and sizeable supply limit follow-through. Favor buying USD on dips toward 61.30-61.50 and fading strength near 61.70, as balanced flows, opportunistic supply, and ongoing geopolitical risks continue to support consolidation rather than a sustained breakout.

Category

G10 Currencies / US Dollar

Outlook

Bearish

Strategy

Position for continued USD strength, as strong US jobs data, elevated geopolitical risks and higher oil prices create the higher-for-longer Fed policy that may be supportive of the dollar. While G10 currencies may see short-term rebounds due to positioning or risk sentiment swings, these are likely to remain corrective rather than trend-reversing, especially given persistent yield differentials. Focus on selling rallies while being mindful of volatility, as financial markets remain driven by news headlines.

Category

Gold

Outlook

Bearish

Strategy

Gold continues its downtrend to a multi-month low of USD 4,024 following a spike in US inflation. With resilient US labor and continued growth, markets are strongly pricing in Fed hawkishness, dragging on precious metals in favor of Treasury yields. The near-term outlook turns bearish for gold, with entry levels at deeper supports. We adjust our recommendation to Underweight for tactical investors, and a Hold for strategic investors with opportunity for accumulation on further dips.

(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.)

Metrobank US-Iran Risk Index: Renewed attacks

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