Tariffs are taking their toll on Private Equity, too

In another rather erratic U-turn, Donald Trump apparently lost his patience with Iran and decided to order US bombers to strike key nuclear facilities. According to US-lawmakers, those missions have been designed as one time strikes and are not the start of a bigger campaign.

Assuming Trump's statement that the sites have been completely "obliterated", there is a good chance that this is indeed the plan. Especially since the public opinion, even among Republicans, is still in favour of negotiations.

The 130$/bbl question remains though: what will Iran do? I stand by my recently made base case scenario, that Iran has only bad options of which the most are likely leading to the end of the current regime. Thus, a serious retaliation such as blocking the Strait of Hormuz or huge attacks on US assets remain unlikely. This isn't to say Iran will not retaliate. They will while trying to walk the fine line of domestic face saving without escalating further.

This increases the risk of creating unintended consequences. Thus the probability of the case looks a bit lower today while the worst case became a tad more likely.

Looking at weekend quotes from IG, there are no signs of panic with stocks trading ~1% lower and oil up ~6% as some early gains have already been paired.