Brent: Higher prices support Dollar and yields – Societe Generale

Societe Generale analysts note Brent has rallied above $110 per barrel, with negotiations over Iran focused on restoring the status quo and reopening the Strait of Hormuz. They highlight the spike over $110 supports the Dollar and lifts bond yields, warning that further Oil gains could trigger profit‑taking in risk assets if prices threaten new highs and undermine equity momentum.

Oil spike underpins Dollar and yields

"Brent rallies to $111/b, President Trump unlikely to accept Iran’s proposal to end conflict after meeting with national security officials."

"Ongoing negotiations centred around staged process: first part of potential deal would focus on returning to status quo and reopening the Strait of Hormuz without restrictions or tolls."

"Bemusing price action yesterday saw USD/G10 lose ground despite the return of Brent crude over $108/bbl but a degree of logic and common sense returned overnight, with the spike over $110/b supporting the dollar and lifting bond yields."

"Profit taking is inevitable if oil prices threaten new highs and derail momentum in stocks."

"Assumption oil prices drops to $70-$80/b at end of projection period."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)