BNY: What to Watch This Week - FJElite

The key issue next week remains the fragility of the ceasefire and the unresolved situation around the Strait of Hormuz, which still connects directly to all major asset classes. For markets, the full reopening of the Strait matters even more than the formal resolution of the war, because that is what determines whether supply chains begin to normalise. Vessel traffic has averaged just nine ships per day since the ceasefire, versus around 140 per day before the war, so any move back toward 50 vessels a day would likely be read as meaningful de-escalation.

The second big focus is IMF week and the expected downgrade to the global growth outlook. Even before the latest shock, the IMF had been leaning toward a more constructive growth view, but the supply disruption has changed that. The main market risk is not just the downgrade itself, but whether the IMF leans into a prolonged stagflation-style scenario, with emerging markets likely to be a key area of attention.

The third major theme is the start of US Q1 earnings season, with banks, TSM, ASML, and Netflix among the key names. Financials should show support from stronger trading and investment banking activity during the quarter, but the bigger focus will be on Q2 guidance, IPO and M&A pipeline commentary, and anything tied to supply-chain disruption. With downside protection still looking relatively cheap into earnings, markets may be especially sensitive to cautious outlooks rather than backward-looking Q1 strength.