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diplomacyApr 14, 2026

Greg Smith: What investors should watch next

Summary

That resilience is now being tested following the announcement of a blockade of the Strait of Hormuz, one of the world’s most critical oil shipping routes. The move comes after the breakdown of diplomatic talks with Iran and it remains unclear whether this represents a sustained escalation or a negotiating tactic. Energy prices remain volatile, with Brent and US light crude oil both trading at around US$100 per barrel – reinforcing the potential for this to evolve into a broader, energy-driven macroeconomic shock. However, it is worth keeping this move in perspective. While prices have risen quickly (from around US$65-US$70 just prior to the war), they remain below the peaks seen during previous major energy shocks. Brent crude, for example, is still trading below levels reached at the onset of Russia’s full-scale invasion of Ukraine, the Arab Spring and the pre-Global Financial Crisis highs – suggesting that while risks have risen, markets are not yet pricing in a worst-case scenario. There are also echoes of last year’s trade tensions. Markets were repeatedly rattled by escalating rhetoric, tariff threats and firm ultimatums, only for conditions to stabilise as negotiations resumed and partial agreements were reached. “Taco” (“Trump Always Chickens Out”) appears to be back, with this pattern of escalation followed by de-escalation helping to underpin the resilience seen across global markets. Whether a similar dynamic plays out this time remains uncertain. The stakes appear higher, with direct implications for global energy supply, rather than just trade flows. While it is possible that the current situation follows a familiar path of brinkmanship and eventual resolution, it is equally plausible that outcomes are more prolonged or disruptive. This distinction is important. Unlike demand-driven inflation, where rising prices reflect strong economic growth, energy shocks are supply-driven. They act as a tax on both consumers and businesses – lifting costs, squeezing margins and reducing discretionary spending power. Historically, such shocks have often slowed economic growth while simultaneously pushing inflation higher – a challenging combination for policymakers and investors alike. Central banks, many (but not all) of which had been edging closer to rate cuts as inflation pressures eased, may now find themselves in a more difficult position. A sustained rise in energy prices is problematic, particularly if inflation expectations begin to move higher again. For markets that have been pricing in a relatively smooth path to lower interest rates (particularly in the US), this introduces a new layer of uncertainty. In New Zealand, this dynamic could create further pressure for households already dealing with rising petrol costs. ANZ this week called for as many as three interest rate hikes over the remainder of the year – a headline-grabbing shift, but one that was in line with current market pricing. The Reserve Bank of New Zealand has previously indicated it would look through the initial impact of oil-driven inflation, but remains acutely aware of the risk of second-round effects, where higher costs become embedded more widely across the economy. For households and businesses already facing cost pressures, there will be hope that such an outcome can be avoided. Closer to home, New Zealand equities have also participated in the recent rebound, with the market remaining within around 5% of its record highs. However, the underlying economic picture is more mixed. While Kiwi manufacturing activity remains in expansion, recent data point to a clear weakening in consumer and business confidence, alongside softer activity indicators more broadly. Rising fuel costs are beginning to weigh on households and businesses alike, with spending increasingly focused on essentials. The services sector is showing particular signs of strain and employment indicators remain soft, reinforcing the idea that economic momentum may be more fragile than the headline data currently imply. For investors, this creates a more nuanced environment. On the one hand, markets have demonstrated a remarkable ability to absorb shocks and recover quickly. On the other, the risks are becoming more complex and increasingly interconnected. Geopolitical developments are now feeding directly into inflation, interest rate expectations and economic growth – all at once. This is very different from the environment that supported global markets through much of the past year, where disinflation and resilient growth provided a relatively stable backdrop. It also highlights an important point: markets are forward-looking, but they are not always perfectly calibrated. Periods of strong performance can sometimes mask underlying vulnerabilities, particularly when sentiment improves faster than fundamentals. None of this necessarily signals an imminent downturn. Markets can remain resilient for longer than expected and geopolitical events can de-escalate as quickly as they emerge. However, the balance of risks appears to be shifting and uncertainty remains elevated. For long-term investors, this reinforces the importance of maintaining a disciplined and diversified approach. Attempting to react to short-term geopolitical developments is notoriously difficult, particularly when markets can move sharply in both directions in a short space of time. At the same time, periods like this can create opportunities. Volatility often leads to greater dispersion in returns between sectors, regions and individual companies – and that is typically where a more active approach can add value. Rather than simply following the market, active investors can adjust positioning, reduce exposure to areas facing rising risks and selectively add to companies that have been indiscriminately sold, despite strong underlying fundamentals. By contrast, passive strategies, by design, continue to track the market, regardless of changing conditions. While this has worked well in broad, rising markets, it offers less flexibility in environments where risks are evolving and market leadership is shifting. However, it is equally important to acknowledge what cannot be known. The path of the current conflict remains highly uncertain and how – or when – it is ultimately resolved is far from clear. Markets may continue to react sharply to new developments and sentiment can shift quickly. The key is not to be driven by headlines, but to remain focused on underlying fundamentals and long-term objectives, while recognising that uncertainty is likely to remain a defining feature of the current environment. As the current backdrop shows, markets can be both resilient and vulnerable at the same time. Understanding that balance – and having the flexibility to respond as conditions evolve – will be critical in the months ahead. Generate is a New Zealand-owned KiwiSaver and Managed Fund provider managing over $8 billion on behalf of more than 180,000 New Zealanders. This article is intended for general information only and should not be considered financial advice. The views expressed are those of the author. All investments carry risk, and past performance is not indicative of future results. To see Generate’s Financial Advice Provider Disclosure Statement or Product Disclosure Statement, go to www.generatewealth.co.nz/advertising-disclosures/. The issuer is Generate Investment Management Limited.

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  • Greg SmithBy Greg Smith

    That resilience is now being tested following the announcement of a blockade of the Strait of Hormuz, one of the world’s most critical oil shipping routes. The move comes after the breakdown of diplomatic talks with Iran and it remains unclear whether this represents a sustained …

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” Both the US and Iran lay claim to control of Hormuz, with Trump threatening US ally Oman with military action over its plans to work with Iran on charging tolls to shipping traffic. In a subsequent post, Trump confirmed that further diplomacy with Iran was not on the agenda.

“There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran. The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating. All water mines have been removed or detonated,” he wrote. S&P 500 one-day chart.

Source: Cointelegraph/TradingView As on Monday, oil avoided major volatility, with WTI crude down 1% at the time of writing at $84 per barrel. US government bonds continued to show strain, with the 30-year yield hitting 5.34%, its highest since January 2007.

“Bond prices are sending warnings,” BNY Mellon analyst Geoff Yu wrote in a research note quoted by the New York Times. Yu said that the surge came as “investors demand more compensation for inflation risk,” while also attributing the upside to government borrowing.

US 30-year bond yields one-month chart. Source: Cointelegraph/TradingView BTC price faces crunch rebound test Updating X followers on BTC/USD, trader and analyst Aksel Kibar eyed the culmination of a potential reverse head-and-shoulders pattern at $62,300.

Related: Bitcoin price spike to $64.5K was ‘low-volume liquidity trap’: Analysis “If $BTCUSD is going to rebound, it has to come from here,” he argued on Monday. Kibar offered a $53,000 target in the event of the head-and-shoulders structure failing, with $76,000 a potential upside target should the rebound sustain.

BTC/USD one-day chart. Source: Aksel Kibar on X.com Previously, Cointelegraph reported that underwater investors were contributing to Bitcoin’s inability to break higher. Its rebound to $64,500 also stopped short of an overhead trend line, the 50-month exponential moving average (EMA).

This moving average is now in place as resistance at $65,827.

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Trump says no talks underway with Iran, Hormuz blockade remains in place

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Trump says no talks underway with Iran, Hormuz blockade remains in place US president says no discussions are taking place or planned with Tehran and reiterates that the naval blockade of the Strait of Hormuz remains fully operational Washington: US President Donald Trump said on Tuesday that no talks are taking place with Iran and that no discussions are currently scheduled between the two countries.

In a post on his Truth Social platform, Trump also said the naval blockade of the Strait of Hormuz remains "in full force and effect." The president did not provide further details regarding US policy towards Iran or any potential future diplomatic engagement.

Trump's comments come amid continued tensions between Washington and Tehran and renewed focus on security and navigation through the Strait of Hormuz, one of the world's most important oil shipping routes.

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Iran ‘won war and diplomacy,’ foreign minister says after Trump’s call for Tehran to surrender

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Iranian Foreign Minister Abbas Araghchi said Tuesday that Iran had “won both the war and diplomacy,” claiming those who initially sought Tehran’s “unconditional surrender” later sought negotiations. Speaking at an event, Araghchi said Iran resisted for days against what he described as “the world’s largest apparent military,” alongside another army claiming military power and with the support of nearly all Western countries and some other states inside and outside the region, according to the Tasnim news agency.

“Those who were seeking unconditional surrender, shortly after the war began, begged for negotiations,” Araghchi said. He claimed Tehran initially rejected a ceasefire and continued fighting until reaching a point where the other side accepted a ceasefire and negotiations “on Iran’s terms.

” “We fought with strength, and we negotiated with strength,” he said, adding that many foreign ministers had told him: “You won both the war and diplomacy.” Araghchi’s remarks came after US President Donald Trump called on Iran on Monday to give up and “raise the white flag.

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Hormuz To Remain Closed Until US Releases Frozen Assets, Meets Interim Deal Conditions: Iran's Ghalibaf

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- Iran demands US lift sanctions and return frozen assets to reopen Strait of Hormuz - Iran's Parliament Speaker warns closure of Strait continues until US ends military threats - Around 20% of global oil supply passes through the Strait, impacting energy security Iran has warned that the Strait of Hormuz will remain closed until the US meets a set of conditions, including the release of frozen Iranian assets, an end to oil sanctions and what Tehran describes as a US blockade and military threats.

Al-Arabiya English reported that Iran's Parliament Speaker and top negotiator Mohammad Bagher Ghalibaf said the Trump administration must meet the conditions before Tehran considers reopening the strategic waterway. “Until the Trump regime removes the blockade, ends the wars across the region, returns Iran's stolen assets, lifts the oil sanctions, and ceases its military threats, the Strait of Hormuz will remain closed,” Ghalibaf said.

Until the Trump regime removes the blockade, ends the wars across the region, returns Iran's stolen assets, lifts the oil sanctions, and ceases its military threats, the Strait of Hormuz will remain closed. pic.twitter.com/fl2RrKnT1R— Seyed Mohammad Marandi (@s_m_marandi) August 18, 2026 Ghalibaf also warned that Iran was prepared to respond more forcefully depending on the actions of its adversaries.

ALSO READ: 'We Control Hormuz': Trump To Declare Strait As US Territory? Here's What President Says The comments add a new condition to an already fragile diplomatic environment, with the Strait of Hormuz at the centre of concerns over global energy supplies.

Around one-fifth of global oil supply typically passes through the waterway, making any prolonged disruption a major risk for crude markets, shipping and energy security. Earlier, Press TV reported that Ghalibaf is scheduled to travel to Baghdad on Wednesday at the head of a high-level Iranian delegation for discussions with Iraqi leaders.

The talks are expected to cover regional developments and bilateral cooperation, including border security, counterterrorism, economic ties and implementation of existing agreements. Iraqi media have also reported that the agenda could include a proposal concerning Iraqi oil exports through the Strait of Hormuz.

The visit comes as regional governments grapple with the implications of continued disruption in one of the world's most important energy corridors. ALSO READ: Hormuz Tensions: Another Ship Hit By Unknown Projectile, Says UKMTO Centre The security situation in the waterway has also remained tense.

The UK's Maritime Trade Operations agency, or UKMTO, said a vessel reported being struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz. “The Company Security Officer has reported that the vessel was struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz,” UKMTO said.

The impact damaged the vessel's engine room and resulted in a crew casualty, the agency said. The remaining crew was being assisted by the Omani coastguard. Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.

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