This report outlines the impact of the US-Iran geopolitical crisis on the G4 economies, focusing on the interplay between inflation, oil-driven energy shocks, and central bank policy responses. Mizuho predicts a shift toward rate hiking cycles in the ECB and BoE, while the Fed remains on hold.
Key Takeaways
- 1.The US-Iran conflict is causing an oil price shock, forcing central banks like the ECB and BoE to consider rate hikes to combat inflation despite slowing growth.
- 2.The US economy shows resilience with a 3.8% GDP nowcast, high equities, and an insulated energy-independent energy sector.
- 3.The BoJ is expected to continue its gradual hiking cycle with target rates potentially reaching 2% by 2027/28 despite subdued current growth.
Table of Contents
- The Background
- The View
- USD
- EUR Rates
- EUR FX
- GBP
- JPY
- XCCY
- EUR Policy
- EUR Rates
- EUR FX
- USD Policy
- USD Rates
- USD FX
- GBP Policy
- GBP Rates
- GBP FX
- JPY Policy
- JPY Rates
- JPY FX
- Mizuho Key Forecasts
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Authors
Jordan RochesterEvelyne Gomez-Liechti
Securities
10-Year US Treasury Note10-Year German Bund
Themes
Energy ShockGeopolitical Risk
Regions
EuropeMiddle EastUnited StatesJapanGermany