Markets have grown hopeful that a U.S.-Iran deal could reopen the Strait of Hormuz. But Capital Economics strategists warn any relief rally may be limited.
Energy prices are unlikely to return to pre-conflict levels immediately. This leaves a terms-of-trade shock for importers in Asia and Europe.
Monetary policy is another obstacle. Central banks have pushed back rate cut expectations, limiting bond market gains.
Investor risk appetite has remained strong during the conflict, reducing the potential for a sharp equity rebound.
