September brought the relationship between geopolitics, energy and interest rates into much sharper focus. The conflict involving the US, Israel and Iran has now persisted for seven months and, with meaningful disruption to energy flows through the Strait of Hormuz still unresolved, the market is having to consider the possibility that expensive energy is becoming more than a temporary shock.

August’s market backdrop was shaped by the interaction between inflation uncertainty, energy prices and monetary-policy expectations.

July’s market backdrop was defined by the interaction between geopolitics, energy prices and monetary-policy expectations. Oil moved sharply higher as concerns around Middle Eastern supply routes, including the Strait of Hormuz, brought energy security back to the centre of the macro debate. At the same time, equity-market leadership narrowed. UK equities advanced, supported by their exposure to energy, mining and financials, while US, global and Chinese equities weakened