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Metrobank US-Iran Risk Index: The waiting game

Market players keep their eyes on developments on the conflict, including traffic through the Strait of Hormuz and US-China talks about Iran.

May 15, 2026 by Metrobank, Investment Counselor Department

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Metrobank’s US-Iran Risk Index settled at 139.4 on May 14th, 0.1% higher than its value of 139.2 on the prior trading day.

Oil prices were flat, as market players priced in news that several vessels were able to cross the Strait of Hormuz on Thursday, though attacks and seizures of some ships kept supply concerns afloat, according to Reuters. Brent Crude closed at USD 105.7 per barrel during UK trading, according to data compiled by Bloomberg.

Moreover, the benchmark 10-year US Treasury yield notched higher by more than 1 basis point, as US inflation data stoke price-rise expectations.

Meanwhile, the US dollar index posted further gains, due to safe-haven flows and cooling expectations for an immediate rate cut by the US Federal Reserve, given recent US inflation data. The dollar-peso exchange rate closed at 61.64 on Thursday, Philippine trading.

Currently, US-Iran negotiations remain at an impasse. Ongoing talks between US President Donald Trump and China's President Xi Jinping will be monitored by market players for potential signals on the direction of the conflict. Expect market players to remain risk-off in the meantime, as they await more concrete developments.

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 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. Value is still seen in 4- to 5-year bonds, which have returned to highs last seen in 2022, and are roughly 30 basis points (bps) below 10-year bonds.
Local Equities	Neutral	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 a slight underweight in duration, with focus on the 3- to 7-year segment, where carry remains compelling, while limiting exposure to further upside in yields. With US inflation titling toward the upside, yields are likely to remain elevated, reinforcing a higher-for-longer rate environment. Although, near-term direction will continue to be shaped by geopolitical developments and inflation expectations.
Global Equities	Neutral	Maintain a cautious stance by prioritizing high-yielding and defensive sectors, while selectively allocating to strong growth companies despite continued market volatility. Heightened geopolitical tensions drive prices higher through an increased risk premium in energy markets, which could continue to cap meaningful gains in global equities.
USD/PHP	Neutral	USD/PHP climbed back to the 61-handle on Monday, though price action remains largely headline driven for now. Downside may be limited by importer and fixing demand. Watch 61.20 and 61.05 as support levels, and 61.75 and 62.00 as resistance levels.
G10 Currencies / US Dollar	Neutral	G10 currencies are bearish against USD for the week, driven by stronger US data and renewed geopolitical risks. G10 is expected to underperform slightly or trade sideways, as a downside is limited by existing support levels while an upside is capped by persistent USD demand. Favor range trading with slight USD bias rather than aggressive directional positioning.
Gold	Neutral	Early rallies past USD 4,700 stalled, as negotiations fail and threats of escalation resurface. However, resilient demand sees gold re-establishing support above 4,600. News headlines will continue to steer 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. Value is still seen in 4- to 5-year bonds, which have returned to highs last seen in 2022, and are roughly 30 basis points (bps) below 10-year bonds.

Category

Local Equities

Outlook

Neutral

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 a slight underweight in duration, with focus on the 3- to 7-year segment, where carry remains compelling, while limiting exposure to further upside in yields. With US inflation titling toward the upside, yields are likely to remain elevated, reinforcing a higher-for-longer rate environment. Although, near-term direction will continue to be shaped by geopolitical developments and inflation expectations.

Category

Global Equities

Outlook

Neutral

Strategy

Maintain a cautious stance by prioritizing high-yielding and defensive sectors, while selectively allocating to strong growth companies despite continued market volatility. Heightened geopolitical tensions drive prices higher through an increased risk premium in energy markets, which could continue to cap meaningful gains in global equities. 

Category

USD/PHP

Outlook

Neutral

Strategy

USD/PHP climbed back to the 61-handle on Monday, though price action remains largely headline driven for now. Downside may be limited by importer and fixing demand. Watch 61.20 and 61.05 as support levels, and 61.75 and 62.00 as resistance levels.

Category

G10 Currencies / US Dollar

Outlook

Neutral

Strategy

G10 currencies are bearish against USD for the week, driven by stronger US data and renewed geopolitical risks. G10 is expected to underperform slightly or trade sideways, as a downside is limited by existing support levels while an upside is capped by persistent USD demand. Favor range trading with slight USD bias rather than aggressive directional positioning. 

Category

Gold

Outlook

Neutral

Strategy

Early rallies past USD 4,700 stalled, as negotiations fail and threats of escalation resurface. However, resilient demand sees gold re-establishing support above 4,600. News headlines will continue to steer 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: The waiting game

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