Metrobank US-Iran Risk Index: Reigniting concerns

Recent reports of attacks along the Strait of Hormuz fizzle optimism and raise concerns over the US-Iran ceasefire.

May 8, 2026 by Metrobank, Investment Counselor Department

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Metrobank’s US-Iran Risk Index settled at 133.5 on May 7th, 1.2% lower than the prior trading day.

Global oil prices edged marginally lower on Thursday, as market players kept their eye on a potential US-Iran truce taking shape. Brent Crude closed around USD 100 per barrel on Thursday, according to data compiled by Bloomberg.

Meanwhile, market optimism for a peace deal also led to the US dollar weakening during Philippine trading hours on Thursday. As a result, the dollar-peso exchange rate closed below the 61-level for the first time in several days, at 60.42.

US-Iran tensions flared up earlier, with news agency Al Jazeera reporting on Friday both sides attacked vessels in the Strait of Hormuz, even as US President Donald Trump claimed the ceasefire is still in effect. Upside risk for oil, the dollar-peso exchange rate, and US Treasury yields is still present, as market players await a resolution to the war.

Metrobank still sees elevated risk and volatility in the near-term while a peace deal has not been struck. Oil prices are poised to stay high, as global supply remains constricted due to the war’s impact on Middle East oil facilities. Consequently, domestic inflation is expected to quicken even further in the coming months.

Moreover, Metrobank forecasts at least one more rate hike by the Bangko Sentral ng Pilipinas (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 in the 2 to 5‑year sector, as foreign exchange‑driven volatility, upcoming bond supply, and potentially more BSP rate hikes may contribute to a steeper yield curve. Better value is seen in 4- to 5-year bonds, whose yields have exceeded 2024 highs, feature a 30-bps premium above 3-year yields, and are roughly flat to the 7-year area.
Local Equities	Bearish	Maintain a cautiously defensive outlook and lean toward banks, defensive names, and high-quality index stocks that could benefit from improved macroeconomic confidence. Stay nimble and consider pullbacks as bargain-hunting opportunities.
Global Fixed Income	Bearish	Maintain exposure to liquid, high‑quality duration in the 2‑ to 5‑year segment, where carry and policy visibility remain most attractive. With recent US inflation and growth data meeting expectations, yields are likely to trade sideways to modestly lower, though near‑term moves will remain driven by geopolitical developments.
Global Equities	Neutral	Maintain a defensive positioning, with a focus on high-dividend and resilient sectors, alongside selective interest in quality growth names amid ongoing volatility. Elevated geopolitical risks are contributing to renewed strength in oil prices through a higher risk premium in energy markets and may continue to limit sustained upside in global equities.
USD/PHP	Mildly Bullish	USD/PHP continues to trade at higher levels, supported by oil prices, ongoing global uncertainty, and general pressure on the peso. Hold existing USD positions but avoid adding too close to 61.70-62.00. Price action is expected to remain contained, with key support at 61.35 and 61.00, and key resistance at 61.80 and 62.00, where upside momentum may be moderate.
G10 Currencies / US Dollar	Neutral	Positioning should remain tactical and rangebound, as mild risk‑on sentiment from Iran’s peace proposal is providing near‑term support to G10 currencies. But geopolitical uncertainty, elevated oil prices, and a resilient USD continue to cap upside. With intervention risk anchoring USD/JPY lower and EUR/GBP holding on its technical supports, the near‑term bias favors selective USD selling on rallies rather than aggressive positioning, while remaining responsive to headline risk.
Gold	Neutral	Gold breaks past its USD 4,700 resistance on renewed hopes for a peace deal. The risk of re-escalation persists, keeping rallies contained and in range. Headlines will continue to drive direction in the near-term, though the long-term bullish view on gold remains intact.

What now?

Category

Local Fixed Income

Outlook

Bearish

Strategy

Stay defensive in the 2 to 5‑year sector, as foreign exchange‑driven volatility, upcoming bond supply, and potentially more BSP rate hikes may contribute to a steeper yield curve. Better value is seen in 4- to 5-year bonds, whose yields have exceeded 2024 highs, feature a 30-bps premium above 3-year yields, and are roughly flat to the 7-year area.

Category

Local Equities

Outlook

Bearish

Strategy

Maintain a cautiously defensive outlook and lean toward banks, defensive names, and high-quality index stocks that could benefit from improved macroeconomic confidence. Stay nimble and consider pullbacks as bargain-hunting opportunities.

Category

Global Fixed Income

Outlook

Bearish

Strategy

Maintain exposure to liquid, high‑quality duration in the 2‑ to 5‑year segment, where carry and policy visibility remain most attractive. With recent US inflation and growth data meeting expectations, yields are likely to trade sideways to modestly lower, though near‑term moves will remain driven by geopolitical developments.

Category

Global Equities

Outlook

Neutral

Strategy

Maintain a defensive positioning, with a focus on high-dividend and resilient sectors, alongside selective interest in quality growth names amid ongoing volatility. Elevated geopolitical risks are contributing to renewed strength in oil prices through a higher risk premium in energy markets and may continue to limit sustained upside in global equities.

Category

USD/PHP

Outlook

Mildly Bullish

Strategy

USD/PHP continues to trade at higher levels, supported by oil prices, ongoing global uncertainty, and general pressure on the peso. Hold existing USD positions but avoid adding too close to 61.70-62.00. Price action is expected to remain contained, with key support at 61.35 and 61.00, and key resistance at 61.80 and 62.00, where upside momentum may be moderate.

Category

G10 Currencies / US Dollar

Outlook

Neutral

Strategy

Positioning should remain tactical and rangebound, as mild risk‑on sentiment from Iran’s peace proposal is providing near‑term support to G10 currencies. But geopolitical uncertainty, elevated oil prices, and a resilient USD continue to cap upside. With intervention risk anchoring USD/JPY lower and EUR/GBP holding on its technical supports, the near‑term bias favors selective USD selling on rallies rather than aggressive positioning, while remaining responsive to headline risk.

Category

Gold

Outlook

Neutral

Strategy

Gold breaks past its USD 4,700 resistance on renewed hopes for a peace deal. The risk of re-escalation persists, keeping rallies contained and in range. Headlines will continue to drive direction in the near-term, though the long-term bullish view on gold remains intact.

(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: Reigniting concerns

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