UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'The spoils of war'
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Apr 8, 2026 Markets treat ceasefire news as proof the conflict is ending, fueling optimism about oil and rates. Discussion focuses on unresolved sticking points like Iran’s demands and Lebanon’s role. Analysis covers why US policy shifted, domestic political pressures, and how reconstruction money may flow to Asia and Europe. Expect reassessments of Gulf defense sourcing and shifts toward renewables, storage, and drone-focused defense.
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Markets Prefer The Oil Barrel Half Full
- Financial markets have leaned optimistic during the war, treating oil risks as manageable rather than catastrophic.
- Paul Donovan notes a ceasefire announcement fuels that optimism but warns markets may price a full end to the war prematurely.
Ceasefire Is Fragile Without Political Motives Aligning
- A ceasefire doesn't guarantee a complete end to the conflict because issues like Iran's nuclear demands and Lebanon's status remain unresolved.
- Donovan highlights low trust in the US administration and rising domestic political pressure as key factors shaping the peace's durability.
Domestic US Politics Pushed De-escalation
- Domestic US pressures — high petrol prices, unpopular war polling, and a heavy Republican defeat in Wisconsin — likely pushed President Trump away from escalation.
- Donovan argues these political signals increase the plausibility of a more lasting settlement.