Zhongjin: The situation in Iran escalates, and the expectations of interest rate cuts by European and American central banks have completely reversed to expectations of interest rate hikes.

The Zhongjin Research Report stated that the recent escalation in the Iran situation has led to another increase in oil prices, while concerns about stagflation in the European and American economies continue to rise. Last week was dubbed the "Super Central Bank Week", as the Federal Reserve, European Central Bank, and Bank of England all released hawkish signals, causing investors to significantly adjust their expectations for monetary policy paths. The implied timing of a rate cut by the Federal Reserve in the futures market has been pushed back to the second half of 2027, with some expectations for rate hikes in 2026. Expectations for rate cuts by the European Central Bank and Bank of England have also reversed to expectations for rate hikes. If central banks overseas start hiking rates, it will tighten global macro liquidity, leading to significant declines in global stocks, bonds, and gold. The central banks' policy choices in the face of oil price shocks are the core issue in global asset pricing at present, and Zhongjin believes that there may be significant expectation gaps in market pricing.