Middle East Tensions Keep Markets on Edge

Amundi Investment Institute's Weekly Market Directions focuses on renewed tensions in the Middle East and their implications for financial markets, inflation and central bank policy. 

• The report notes that renewed attacks around the Strait of Hormuz interrupted the recent decline in oil prices, pushing Brent crude back toward $80 per barrel and reminding investors that the ceasefire remains fragile. 
• While both the United States and Iran still have incentives to avoid a broader conflict, Amundi expects continued geopolitical uncertainty to keep energy markets volatile and inflation risks elevated. 
• Given the uncertain geopolitical backdrop, the report recommends maintaining diversified exposure across regions and asset classes to improve portfolio resilience as markets navigate recurring shocks.