The Weekly Briefing from Capital Economics

News of a record release of emergency oil reserves has quickly been overshadowed by images of tankers on fire in the Strait of Hormuz. Thirteen days into the conflict, tensions in the Middle East appear to be escalating rather than easing. What is the view from commodity and financial markets, and what could this mean for the global economy?
Capital Economics has modelled three scenarios to assess how oil and gas supplies and prices could evolve as the conflict unfolds, and what this might mean for global growth, inflation, central bank policy and financial markets.

In this special episode of The Weekly Briefing:
Chief Climate & Commodities Economist David Oxley discusses how our scenarios map out potential paths for oil and gas supply and prices, depending on the duration of the conflict and the extent of damage to production and infrastructure.
Group Chief Economist Neil Shearing explains how these scenarios could translate into different growth and inflation outcomes globally, and what they might mean for central bank policy — including what to expect from the upcoming meetings of the Fed, Bank of England, ECB and Bank of Japan.
Deputy Chief Markets Economist Jonas Goltermann explores how financial markets could respond, how far prices might rebound in the event of a ceasefire, and which trades may never fully recover.
Explore all our coverage of the conflict, including our scenarios here: https://www.capitaleconomics.com/key-issues/iran-conflict
Interested in trial access? Email us at [email protected]

Conflict in the Middle East, a surge in oil and gas prices, and a surprise drop in US payrolls – it’s been a turbulent week for the global economy.
In the latest episode of The Weekly Briefing, Capital Economics Group Chief Economist Neil Shearing joins David Wilder to discuss what the spreading Middle East conflict and sharp spike in energy prices mean for global growth and inflation, and why the latest US jobs report may not signal a major slowdown.
Later, Senior Climate and Commodities Economist Kieran Tompkins explains the scale of disruption in global oil and gas markets, whether alternative supply can offset the shock and what the longer-term implications could be for energy markets.
Read all our key insight into the Middle East conflict here:
https://www.capitaleconomics.com/key-issues/iran-conflict
Get in touch for a trial to our platform:
[email protected]

Amid widening conflict in the Middle East, our economist team held an online briefing first thing Monday to tackle some of the key questions that clients have been asking. In this edited clip from that briefing, you’ll hear the team tackle issues, including:
The extent of disruption to traffic through the Strait of Hormuz and the implications for oil and gas prices;
The point at which rising oil prices would force central banks to slow or abandon policy easing;
The dollar as a safe haven currency in this time of geopolitical upheaval;
How this conflict could shape the economic outlook for the GCC economies;
The likelihood that a change of leadership in Tehran could open the way for a deal with the US.
With: Jennifer McKeown (Chief Global Economist), William Jackson (Chief EM Economist), David Oxley (Chief Climate & Commodities Economist), Jonas Goltermann (Deputy Chief Markets Economist). 
Note: This client briefing was held at 1000 GMT/1800 SGT on Monday, 2nd March
See our dedicated Iran conflict page below for more key analysis, and contact us at [email protected] to find out about access. 
https://www.capitaleconomics.com/key-issues/iran-conflict

Is China’s latest Five-Year Plan about to reset its economic model and tackle the imbalances weighing on both the domestic and global economy?

Speculation always builds ahead of a new Five-Year Plan. But this time, the stakes feel higher. With growth slowing, debt risks lingering and external tensions elevated, could this Plan mark a genuine turning point?

That is what Julian Evans-Pritchard will be watching for as the National People’s Congress opens in Beijing on Thursday. On The Weekly Briefing, he joins Group Chief Economist Neil Shearing to talk to David Wilder about the outlook for China’s domestic and external imbalances and to address the key questions, not least how this adjustment will proceed, how willing its trading partners will remain to absorb China's goods surplus and whether this all risks tipping the world into crisis?

Elsewhere in the episode, Megan Fisher from our Commodities team revisits the cocoa price boom she had long warned was unsustainable. Now that prices have collapsed, she sifts through the fallout to explain what comes next and whether chocoholics are likely to see any relief.
Events and analysis referenced in this episode
China NPC Drop-In 
https://www.capitaleconomics.com/events/china-drop-key-takeaways-npc-and-new-five-year-plan
UK Spring Statement Drop-In
https://www.capitaleconomics.com/events/uk-drop-chancellors-spring-statement-fiscal-signals-political-risks-market-implications
US non-farm payrolls preview
https://www.capitaleconomics.com/publications/us-employment-report-preview/health-care-likely-be-key-driver-payrolls-again

The Supreme Court has finally ruled on Donald Trump's tariffs with an opinion that the president has no right to impose tariffs under the International Emergency Economic Powers Act. So what happens now?
Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann join The Weekly Briefing from Capital Economics to discuss the implications of this legal ruling for the US economy, for Federal Reserve policy and for financial markets. In their conversation with David Wilder, Stephen and Jonas address key issues, including:
How the White House could rebuild its tariff regime – and rebuild it quickly
What happens when billions of dollars in tariff refunds flow back into US company accounts 
Why signs of resurgent inflationary pressures are narrowing the room for Fed rate cuts
How the bond market is responding to the Supreme Court news
Why the stock market rally has stalled, and whether this news could get it going again.
Related reading
IEEPA ruling unlikely to pull PCE inflation back to 2%
https://www.capitaleconomics.com/publications/us-economics-weekly/ieepa-ruling-unlikely-pull-pce-inflation-back-2
Stock market rotation is a warning of trouble ahead
https://www.capitaleconomics.com/publications/capital-daily/stock-market-rotation-warning-trouble-ahead
SC rules that Trump's IEEPA tariffs are illegal
https://www.capitaleconomics.com/publications/global-economics-rapid-response/sc-rules-trumps-ieepa-tariffs-are-illegal