UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Living in uncertain times'
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Mar 23, 2026 Discussion of how vague US objectives around the Gulf war fuel market volatility. Tensions between the US and Iran and deadlines around the Strait of Hormuz raise regional risk. Threats to infrastructure and water supplies are highlighted. Political signals from French local elections are noted. Climate factors like El Niño and fertilizer disruptions are flagged as food-supply risks.
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Unclear US Objectives Create Market Volatility
- Investors struggle because US war objectives are unclear, making progress and war length impossible to measure.
- Paul Donovan says contradictory statements from US officials give markets outsized reactions, driving volatility.
Escalating US–Iran Moves Weaken Risk Markets
- Recent US–Iran exchanges weakened risk assets as deadlines and threats escalated uncertainty.
- Donovan cites Trump's Strait of Hormuz deadline and reciprocal threats to plants and banks as drivers of market reactions.
Strait Deadline Unlikely And Desalination Threats Are Serious
- The Iran Strait of Hormuz deadline has little chance of compliance and Iran is formalising paid passage, reducing likelihood of immediate de-escalation.
- Threats to desalination plants are especially serious given regional reliance on them for drinking water.