Geopolitics Reasserts Itself as Markets Rotate

Edmond de Rothschild’s latest Market Flash argues that renewed geopolitical risk is driving asset rotation, even as macro resilience supports equities 

• Failed Ukraine-Russia talks and escalating US-Iran tensions—including risks around the Strait of Hormuz (20% of global oil flows)—lifted Brent toward $70–72 and revived safe-haven demand.

• FOMC minutes show division amid slowing inflation and resilient growth, reinforcing a “patient Fed,” while UK unemployment at 5.2% has markets pricing two cuts before June.

• Equity leadership is rotating toward energy, industrials and value; high-quality US Treasuries and IG credit regain diversification appeal as stock-bond correlation normalises.

Is volatility a transient geopolitical premium—or the start of a broader regime shift? The full flash assesses cross-asset positioning.