WS #16730

The geopolitical narrative has decisively shifted from ceasefire speculation to active escalation, driven by confirmed US defensive strikes on Iranian targets and the resumption of Russian oil infrastructure attacks. While US-Iran diplomatic channels remain deadlocked, the market is pricing in a supply shock: Brent crude has rallied to $106.34 (+1.99%) as Ukraine’s fifth consecutive night of strikes on Russian refineries (Yaroslavl, Samara) tightens global diesel and jet fuel supplies. This energy squeeze is directly pressuring aviation margins, with Lufthansa warning of a €2 billion fuel cost increase for 2026. In equities, the macro environment is defined by a 'risk-off' rotation away from high-multiple tech and into energy and defense. Apple has reclaimed the title of world's most valuable company, surpassing Nvidia, as investors rotate out of AI speculation into Apple's defensive cash flows and record India revenue. Conversely, Palantir sold off despite a 96% revenue surge, signaling that valuation concerns are overriding growth narratives. The RBA's rate hike to an 18-year high (4.85%) reinforces the 'higher for longer' macro backdrop, further penalizing rate-sensitive sectors.