UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'War and affordability'
Apr 6, 2026
Discussion of why a political social post is unlikely to shift investor policy views. Ongoing Iranian strikes on Gulf energy sites and their delay of oil-market normalization. How current oil levels influence the US affordability squeeze. The timing of US CPI and petrol price moves and how gasoline costs shape consumer inflation perceptions.
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Markets Will Discount Trump's Iran Post
- Paul Donovan argues investors will downplay President Trump's social media post on Iran as aimed at his Republican base and not a policy shift.
- Markets see the post as nonstandard diplomacy and thus unlikely to change investor expectations about US policy or immediate market moves.
Deadlines Rarely Move Markets But Gulf Attacks Do
- Donovan notes Trump seemed to give Iran a 24-hour deadline to reopen the Strait of Hormuz, but markets rarely react strongly to such deadlines.
- Ongoing Iranian strikes on Gulf energy targets keep oil market disruption risk elevated despite deadline talk and mediator efforts.
Investor Optimism Masks Structural Oil Risk
- Markets have shown an optimism bias from limited reports of mediation and ceasefire attempts, reflecting investor desire to believe the conflict won't persist.
- Oil prices remain below levels needed to force demand reduction, so supply losses from the Gulf still threaten affordability dynamics.