Q2 2026 Economic Commentary

Memorandum of understanding

The past three months have been dominated by a blend of renewed geopolitical and political risk, sticky inflation, cautious central banks and volatile market dynamics around the Artificial Intelligence (AI) theme. The outbreak of conflict and intermittent peace talks in the Middle East were the main macroeconomic shock.

Through April and May, disruption around the Strait of Hormuz and the risk of a wider regional conflict pushed energy prices sharply higher, threatened shipping routes and reignited fears that the global disinflation trend was stalling. The announcement of a US-Iran memorandum of understanding and the subsequent resumption of hostilities has kept the Brent crude oil price volatile and oil derivative products at high prices, preserving pressure on inflation.