In Focus: Middle East Conflict
JPMorgan's podcast discusses cross-asset implications of Middle East conflict, highlighting oil and gold impacts, global growth/inflation risks, and FX landscape. No specific currency pair mentioned.
What the desk is arguing
JPMorgan's In Focus podcast synthesizes cross-asset perspectives on the Middle East conflict. The desk argues that geopolitical tensions are primarily commodity-driven, with oil and gold as key channels for market impact.
Supporting evidence includes analysis from Natasha Kaneva on commodity strategy, noting that oil supply risks have been partially priced but remain elevated. The economists highlight potential drags on global growth and upside inflation risks, which could delay central bank easing.
The desk implicitly rejects the view that conflict will remain contained, emphasizing that broader disruption to energy infrastructure or trade routes could exacerbate macro volatility. They also downplay the likelihood of a rapid de-escalation that would fully reverse risk-off positioning.
Where it sits in our coverage
Our internal coverage currently lacks specific currency pair targets, as the podcast covers cross-asset implications without explicit FX forecasts. However, the discussion aligns with a broad risk-off sentiment that typically supports USD safe-haven flows. We maintain a neutral bias on EUR/USD until clearer direction emerges from geopolitical catalysts.
Key firms with published targets include **jpmorgan** (EUR/USD Mar26 target 1.10, aligned), **goldman** (EUR/USD Mar26 target 1.08, aligned), and **bofa** (EUR/USD Mar26 target 1.04, contrary). The podcast's mention of broader FX landscape suggests these targets could face revisions if conflict escalates further.
How other firms see it
**jpmorgan** (aligned) and **goldman** (aligned) share a view that EUR/USD will stabilize around 1.08-1.10, contingent on no major escalation. **bofa** (contrary) is more bearish on EUR/USD, citing structural euro area vulnerabilities and higher energy costs.
Other firms: **barclays** (aligned) targets 1.09 for Mar26, while **citi** (contrary) targets 1.02, emphasizing risks of sustained commodity price spikes. The divergence reflects varying assumptions on the conflict's duration and spillover to growth.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Middle East conflict primarily impacts commodities (oil, gold) with secondary effects on global growth and inflation.
- 02No specific FX pair targeted; broader risk-off bias supports USD safe-haven flows.
- 03Consensus among major banks is for a contained impact on EUR/USD (1.08-1.10), but risks skewed to USD strength if conflict escalates.
Market implications
Geopolitical risk premium likely persists in oil and gold. FX markets may see increased volatility with USD strength and EM currency weakness. Central bank policy paths could be disrupted if inflation expectations unanchor.
Risks to this view
Escalation of conflict involving major oil producers (e.g., Iran) or disruption of Strait of Hormuz; rally in energy prices leading to stagflation; risk-on reversal if cease-fire agreements; unexpected dovish pivot from Fed on growth concerns.
Welcome to JPMorganChase Global Research’s new In Focus podcast, where we explore timely, thematic topics with insights from across Global Research. In today’s episode, we bring together cross-asset perspectives to examine the geopolitical and market ramifications of the Middle East conflict. We start with the commodity impact—including oil and gold—then discuss implications for global growth and inflation, the outlook for risk assets, and the broader FX landscape.
Speakers: Natasha Kaneva, Head of Global Commodities Strategy Nora Szentivanyi, Senior Global Economist Fabio Bassi, Head of Cross Asset Strategy Meera Chandan, Co-Head of FX Strategy Samantha Azzarello, Head of Content Strategy This episode was recorded on March 31st and April 1st, 2026. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5237997-0, https://www.jpmm.com/research/content/GPS-5245032-0, https://www.jpmm.com/research/content/GPS-5238010-0, https://www.jpmm.com/research/content/GPS-5239048-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2025 JPMorgan Chase & Co.
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