Mojtaba Khamenei’s aggressive tone—in which he stated that he would seek to keep the Strait of Hormuz closed as long as the war continues—put renewed pressure on the oil market, with prices rising 10% to $96 for WTI and $101 for Brent, negatively impacting both equities and fixed income globally. Rates rose by up to 9 bps in Europe and 8 bps at the short end of the Treasury curve, which experienced a marked bear flattening as long-term bonds remained unchanged. Among other commodities, base metals and agricultural products rose, while precious metals fell 2% amid a further 0.5% appreciation of the dollar, which hit its highest level since November (DXY 99.72).

Venezuelan bonds opened strong, rising as much as 0.5 points in the morning, but gave up some of those gains to close up 0.1–0.25 points, with stronger demand for less liquid bonds—such as Venezuela’s short-term issues—which have been lagging behind in relative terms.

Latin American bonds were sold off throughout the day and particularly atthe closeof trading, with issues such as Pemex, El Salvador, and the Dominican Republic falling by up to 1 point, while spreads widened by 3–6 basis points.