The Great 2026 Reset

Deutsche Bank's 'Great 2026 Reset' details the market impact of the Iran conflict, highlighting multi-year highs in global bond yields and a structural decoupling of US equities from oil-driven rate pressures.

Key Takeaways

• 1.The ongoing Iran conflict has triggered a significant oil shock, though it remains less severe than the historical peaks of previous decades.
• 2.US equities have decoupled from the oil shock, while the 10yr Treasury yield maintains a tight correlation with crude prices.
• 3.Global bond yields have reached multi-year highs (e.g., Japan at 1997 levels) as nominal GDP and yields converge, ending the era of financial repression.

Table of Contents

• The Great 2026 Reset...
• Q1 US earnings season has been great though…
• The longer the conflict/stand-off lasts the tougher it is politically…
• Rates are under pressure…
• Rising yields aren't great for housing...
• Will the conflict impact the dollar status
• And finally... when the war is over we have to remember disruption...

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