Most global bond and stock indices rallied last week, with several global (including U.S.) stock indices closing at record highs. PCE data for April confirmed elevated inflation in the U.S., and the fact that consumers are getting poorer. This is a real contrast with the ever-higher improvement in most global asset prices.

Stocks are in a severe recovery stage, boosted further by the announcement on Friday that the Strait of Hormuz was being reopened to commercial traffic. Oil prices plunged, stocks took another leg up, and yields fell across the curve. Let the good times roll.....or are things really this good?

Global stocks and bonds continued to spiral down as the war in the Middle East continues with no end in sight. In this update, I discuss the Fed's dilemma in a stagflation scenario, and how oil prices are likely to affect both headline and cor inflation.

Investors got hammered again this week with few places to hide. Having said this, it could be worse. The Trump Administration continues to release conflicting information about the status of the war, but it is clear that the Iranians are not about to capitulate. This is causing all sorts of problems with the oil market, and this in turn is splattering both global stocks and bonds.

War breaks out with rather significant effects on the global economy, including sharply higher oil prices and increasing inflation expectations. This filtered through to stocks and bonds, both of which took a beating this week.

Risk markets were full on this week, with nearly everything better except the sagging US Dollar and safe-haven gold. What's not to like, as peace breaks out, US economic growth signals continued strength, and the trade war continues to be watered down.

CPI and PPI were red hot, UK CPI too. Neither the equity nor bond market much liked this one bit. Gold, oil, USD better, rest pretty poor.

Ukraine-Russia conflict dominates news, although inflation data in the Eurozone and US continues to be red hot. Investors don't care!

This week was dominated by geopolitical news around Ukraine and Russia. Uncertainty led to a flow out of risk assets and into safe havens.