CITIC Securities: Six Core Views on US-Iran Conflict

CICC research report pointed out that Trump's dominance in the US-Iran conflict is far lower than last year's trade war. Although Trump has repeatedly expressed TACO's willingness and signals, in fact, the US-Iran conflict is still evolving towards escalation. The market cannot judge the direction of short-term warfare, but because the Strait of Hormuz is a global energy bottleneck, just like several times in history when the center of the oil price shifted, the market can trade the medium- to long-term impact of this US-Iran conflict - the global order and asset "reshuffle". CICC has six core views on the US-Iran conflict: First, the clock for major asset allocation shifts from bonds to commodities. Second, global asset allocation will retract to core major countries, China and the United States. Third, asset allocation can find opportunities in supply chain reshaping and the development of new and old energy sources. Fourth, the Fed's monetary policy may be looser than market expectations. Fifth, in the end, it may be ignited by Japanese bonds and impact on overseas liquidity. Sixth, the market needs to price the rebuilding of a currency and financial system order.