• The Global Liquidity cycle peaked in Q3 2025 and is not slated to bottom before 2027. We have pared back risk exposure, as the underlying currents driving liquidity lower will ultimately dominate geopolitical twists and turns
• The Iran conflict’s impact on economies is significant but so far manageable (roughly ½–¾% point of GDP growth), less than the tariff tantrum and COVID. While a long conflict would worsen this, economic activity is still slated to recover through 2026
• Global Liquidity looks more vulnerable than the broader economy. It was already falling pre-conflict, and higher oil prices, bond volatility (MOVE), and a stronger US dollar (DXY) have further dented it, with the Global Liquidity Index (GLI ) falling to 44.1 in March from a December peak of 56.1
• Bond market moves confirm this deterioration in Global Liquidity. Yield curves are inflecting lower and falling term premia highlight a demand for safety. Gold, meanwhile, is underpinned by China’s on going ‘monetization’. Higher gold must translate into higher oil and other commodity prices.
