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Metrobank US-Iran Risk Index: Terms and conditions
Risk levels remain high as both the US and Iran lay out their plans to end the war
By Metrobank Research, Investment Counselor Department
Metrobank’s US-Iran Risk Index settled at 137.3 on March 25, 2026, 1.6% lower than the previous day.
Oil prices moved downward on news that Iran was reviewing the 15-point plan sent over by the US to end the war. According to the Associated Press, the US’s 15-point proposal included plans for Iran to reopen the Strait of Hormuz, a critical transit point for global oil shipments.
As a result, Brent crude closed slightly lower on Wednesday at USD 102 per barrel, as financial market players priced in less risk from the strait’s closure. The benchmark 10-year US Treasury yield followed suit, as inflation expectations tempered, closing the US trading day nearly 3 basis points lower. The US dollar still maintained its strength from safe-haven demand, with the dollar-peso exchange rate closing above the 60-level again during Philippine trading hours.
Iran eventually announced their rejection of the US’s proposal and issued their own plan to settle the conflict, which included an end to violence against Iranian officials and affirmation of the country’s sovereignty over the Strait of Hormuz, according to the Associated Press. Market players will likely continue to price in heightened risks and uncertainties going forward, especially as US President Donald Trump’s five-day pause on Iran strikes nears its end.
Metrobank maintains the view that oil prices will stay elevated as long as the Strait of Hormuz remains blocked. Meanwhile, high inflation due to rising oil prices will likely compel central banks globally to raise their policy rates this year, including the Bangko Sentral ng Pilipinas (BSP). Moreover, we still see the dollar-peso exchange rate staying elevated in the near-term, as steady dollar demand weighs on a historically 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 on duration amid elevated foreign exchange volatility. Focus on liquid 2–5-year tenors and add only on pronounced yield spikes. Avoid extending duration, especially at the long end of the yield curve, until peso conditions and global risks show clear signs of stabilization. |
| Local Equities | Bearish | Expect bargain hunting of cheaper names in the near term. However, gains may remain capped amid oil-price volatility and developments in the Middle East. Buy on dips and take profit during rallies. |
| Global Fixed Income | Bearish | Continue to favor short-dated quality bonds up to 5 years, as inflation fears push yields upward. Expect yields to stay elevated, as geopolitical tensions keep investors cautious. |
| 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 | Rangebound | Buy US dollars on dips or near the 59.85-60.15 support levels, as short-term fundamentals favor a mildly firmer USD after the US Federal Reserve (Fed) maintained its policy. Still, elevated energy prices and geopolitical risk will provide demand for USD. The market is expected to trade on headlines for the lack of high-impact US and Philippine data release this week. |
| G10 Currencies / US Dollar | Bearish | Major currencies EUR, GBP, and JPY see some recovery following their respective central banks’ decision to pause. However, inflation concerns driven by higher-for-longer oil prices continue to weigh on global growth prospects, weakening G10 economies dependent on energy imports while safe-haven trades favor the USD. |
| Gold | Bearish | Consistently elevated oil prices have driven hotter US inflation and delayed Fed rate cut expectations, contributing to a stronger US dollar and lower gold prices. The precious metal has broken through key levels below USD 5,000 but saw strong support from bargain hunters at the USD 4,100 level. Gold has since recovered back to between USD 4,400 to 4,600, which are good levels to pick up, but we prefer opportunities to pick up closer to USD 4,000, should hostilities escalate further. Our long-term view is still for gold to outperform, as global central banks diversify their reserve assets away from 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.)