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Metrobank US-Iran Risk Index: Mounting tensions
As the Middle East conflict rages on, risk levels remain high.
By Metrobank Research, Investment Counselor Department
Metrobank’s US-Iran Risk Index settled at 139.8 on March 17, 2026, 2.6% higher than the previous day.
Oil prices rose on Tuesday, as the conflict in the Middle East continued. Projectiles hit United Arab Emirates’ Fujairah port, a key oil facility for the country, and surrounding areas, according to media reports.
Brent crude settled higher at USD 103.42 per barrel, one of its highest levels since the conflict first erupted, according to data compiled by Bloomberg.
Meanwhile, dollar strength continued to soften on Tuesday, with the US dollar index settling lower. While markets are still very volatile, this may be a sign of investors leaning slightly more risk-on, leading to reduced safe-haven demand for the currency. The benchmark 10-year US Treasury yield also settled lower, possibly indicating investors pricing in less inflation risk.
Still, for as long as the Strait of Hormuz stays closed, market risk remains high. Moreover, Iran has vowed to retaliate after the death of its security chief, according to the BBC. This risks further escalation of the conflict.
Metrobank maintains its expectation for upside oil risk to endure, as the Middle East conflict rages on. Domestically, while a potential removal of fuel excise taxes will provide some relief to Filipino consumers, local inflation is still expected to accelerate as oil prices rise. We expect this to prompt the Bangko Sentral ng Pilipinas (BSP) to preemptively end their easing cycle this year. Additionally, dollar strength will persist, as safe-haven demand continues. This puts pressure on the peso and will keep the dollar-peso exchange rate elevated in the near future.
![](https://wealthinsights.metrobank.com.ph/app/uploads/2026/03/260318-MB-US-Iran-Index.png")
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 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. Focus on liquid 2–5-year tenors and add only on yield spikes or auction-driven dislocations. Avoid extending until foreign-exchange and geopolitical risks 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 upward. 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 near the 59.50–59.70 support levels. The ongoing US–Iran tensions show little sign of easing, which should continue to drive safe-haven demand and put pressure on the peso. Persistent inflation pressure will likely influence the future policy paths of both the BSP and the US Federal Reserve, providing additional support for the dollar. |
| G10 Currencies / US Dollar | Bearish | The prolonged conflict continues to favor the US Dollar over its G10 counterparts, though recovery may be sharp once risk sentiment improves. Major currencies like the EUR, GBP, and JPY are now at key levels and may see fresh lows if elevated energy prices are sustained. |
| 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 faster US inflation, delayed US Fed rate cuts, and a stronger USD. The precious metal has fallen just slightly below USD 5,000. Any further dip below USD 4,900 and we could see new entry opportunities at the USD 4,800 and USD 4,600 areas. Our long-term view is steady price appreciation as global central banks purchase gold to diversify reserves beyond the USD 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.)