The dominant macro driver remains the US-Israel war against Iran, now in its fourth month, with the Strait of Hormuz still effectively closed and President Trump publicly dismissing the prospect of renewed peace talks on Monday. Brent crude has surged more than 55% since the conflict began in late February, sitting near $95/bbl, while J.P. Morgan estimates the sustained energy shock could shave 0.6% off annualised global GDP growth in the first half of 2026 — raising the spectre of stagflation that central banks across both developed and emerging markets are now grappling with. The ECB is widely expected to hike 25bp at its June meeting, with markets pricing a 94% probability, as eurozone inflation jumped to 3.0% in April well above the 2% target. Meanwhile the Fed remains in a holding pattern, watching labour market data building toward Friday's nonfarm payrolls, even as surging energy costs increasingly dominate the inflation narrative over employment conditions.