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Metrobank US-Iran Risk Index: Sending reinforcements
The US ramped up its military presence in the Middle East, heightening risk levels in markets.
By Metrobank Research, Investment Counselor Department
Metrobank’s US-Iran Risk Index settled at 149.3 on March 30, 2026, 0.8% higher than Friday’s. This marks another all-time high for the index.
The rise in risk levels stems from further gains in oil prices, as financial market players continue to see high uncertainty in the Middle East following the US’s deployment of thousands of troops in the area.
According to Reuters, the troops may be used to seize Kharg Island, one of Iran’s largest oil terminals, adding further risk to Middle East oil supply. Brent crude prices closed 0.2% higher on Monday as a result.
Moreover, the US dollar sustained its strength, with investors continuing to flock to the safe-haven asset as further Middle East escalations dimmed hopes for a ceasefire in the area. As a result, the dollar-peso exchange rate recorded another record high close on Monday during Philippine trading hours at 60.69.
Meanwhile, the benchmark 10-year US Treasury yield saw some relief as US Federal Reserve Chair Jerome Powell said that inflation expectations were grounded despite rising energy prices. He also said the current US policy interest rate was “a good place” to observe the impacts of the US-Iran conflict, according to CNBC, quelling market fears of interest rate hikes by the central bank in the near future.
Metrobank still sees continued upside oil risk as the Strait of Hormuz, a critical transit point for global oil shipments, remains closed. We also expect the Bangko Sentral ng Pilipinas to raise its policy rate this year to combat rising inflation. Lastly, we see the dollar-peso remaining elevated as the dollar continues to strengthen on safe-haven demand.
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- to 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 | Stay in high-quality, short-duration bonds as the defensive play amid ongoing geopolitical tensions. Expect yields to stay elevated, as inflation remains a major concern for global markets. |
| 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 US dollar after the US Federal Reserve (Fed) maintained its policy. Still, elevated energy prices and geopolitical risk will provide demand for the US dollar. The market is expected to trade on headlines for the lack of high-impact US and Philippine data releases 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 US dollar. |
| Gold | Slightly 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 to around USD 4,400, but we prefer opportunities to pick up closer to USD 3,800-4,000, should hostilities in the Middle East 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.)