Iran strikes tank bonds and gold; rate fears trump safe havens.

Transcript

Tom Oil surging on fresh Iran strikes, and gold — GOLD — actually fell? The market's treating geopolitics like a footnote to the Fed. We're breaking it down.

Marie Welcome to Investment Flash, London Edition, Monday July thirteenth, twenty twenty-six. I'm Marie, alongside Tom and Gerald. Let's get into it.

Marie Tom, I've got to say — your Weekend Edition call on crude after Hormuz closed? USO, the US Oil Fund, is up about four percent in a week. Not bad, buddy.

Tom Ha — see! And my EasyJet buy? Up two percent. Two percent is two percent. I'll take the win.

Gerald Yeah, but let's not forget your short Treasuries call from the weekend — TLT, the long-duration Treasury ETF, is hugging its fifty-two-week low, so I'll claim my victory on that too. Alright, look, today's main event is the macro repricing from the Iran strikes.

Gerald Fresh US strikes on Iran, and the reaction is bizarre. Oil climbed, but bonds and stocks fell, and gold — the classic haven — dropped. The Wall Street Journal says gold declined despite the geopolitics. It's all about rate hike bets.

Marie Right — that's the core. Higher oil means higher inflation expectations, which mean the Fed has to hike more. So even havens get sold because cash is the only thing that will yield more. It's a rates-over-safety trade.

Tom Which is why USO is the way to play it. It's up four point two percent in a week, but still thirty percent below its fifty-two-week high. If this conflict escalates, there's a lot of catch-up room.

Gerald Yeah, but TLT is just two percent above its fifty-two-week low. The short bond trade is crowded. One soft inflation print and you get a violent snapback. I'm just saying be careful.

Marie But look at GLD, the gold ETF — down one point three percent on the week, five point three percent year to date, and breaking below three-eighty support would be really bearish. The gold short actually makes sense here.

Tom And the S&P 500 ETF is just one percent off its record high. Equities don't care yet. They're looking through the smoke alarm.

Gerald That's the sitcom part. Stocks ignoring the smoke alarm. Meanwhile, gold traders are hitting snooze on the haven button.

Marie Ha — yeah, exactly. The only button working is the rate hike button.

Tom Alright, so sell TLT, sell GLD, buy USO, and hold your nose on equities for now.

Marie Let's pivot to Japan. Toyota and its affiliates are selling billions in cross-shareholdings — Panasonic, Renesas — improving governance. Nikkei Asia covered it. TM, Toyota, is down nineteen percent year to date. This unwinding could unlock value.

Tom It's a hold for now. But the momentum is with the repatriation trade. Japanese small and medium companies exiting China, bringing capital home. That's why the Japan hedged equity ETF, DXJ, is up twenty-two percent this year.

Gerald Twenty-two percent and near a fifty-two-week high. It's priced for perfection. I'm not chasing that, mate. A small long at best.

Marie But the narrative is real. The SME exodus from China is a structural flow. It's not just a trade; it's a trend.

Tom Agreed. Hold Toyota, and a small position in DXJ. You can't ignore those capital flows.

Gerald Speaking of gold, the miners are doing their own thing. Genesis Minerals bid for Vault Minerals, and Regis Resources just walked away. The Journal says the deal no longer met Regis's value threshold.

Marie So Regis will live to fight another day. Prudent. Genesis is likely to get it now — no competition.

Tom GMD.AX — Genesis — rallied four point two percent last session but still down nineteen percent year to date. Plenty of room to re-rate as the deal clears.

Gerald And Regis Resources, down fifteen percent year to date, no catalyst. Hold it and watch. Maybe value emerges later.

Tom Clear runway for Genesis.

Marie Exactly.

Gerald One hundred percent.

Marie Now, the week ahead in Asia is packed. Bank of Korea expected to hike to two point seven-five percent, TSMC reports Q2 earnings, and China Q2 GDP seen at four point six percent year on year, down from five.

Tom TSMC is the big one. Up thirty-six percent year to date, priced for perfection. Any AI demand disappointment and it could sell off sharply. I'm nervous about that one.

Gerald If you're nervous, imagine South Korea. The South Korea ETF, EWY, up eighty percent year to date. A hawkish BOK hike could be a wrecking ball. Sell that.

Marie And Chinese large caps, FXI, at multi-year lows ahead of GDP. Downside limited unless the data really surprises to the downside. So watch it, but don't short it.

Tom TSMC earnings Thursday could actually be the pivot for the whole market. Blowout AI numbers might revive the growth trade and kill the rate-hike narrative.

Gerald That's a big if. But fair, it's the event to watch.

Marie Here's a clean one: Australia's renewable energy shift is driving a storage boom, and they're buying Chinese batteries like crazy. The FT says Australians are 'going gangbusters' on BYD batteries.

Tom BYDDF — that's the BYD stock — up two point eight percent last session, but still down fifteen percent year to date, trading at a cheap thirteen times forward earnings. Early stage thematic play.

Gerald Thirteen times forward for a battery play in a storage boom? That's ... not offensive. I might actually consider it.

Marie It's one of those where the headline hasn't caught up with the stock yet.

Tom Add it to the watchlist, or take a small bite.

Gerald Across to Europe: Nippon Paint offering seven and a half billion euros for an AkzoNobel unit, trying to gatecrash a rival deal. The FT says it could spark a bidding war.

Marie AkzoNobel, ticker AKZA.AS, flat on the session and down four percent in a week. The event isn't priced in at all. That's a buy.

Tom I love a good gatecrash. mergers and acquisitions bankers popping champagne.

Gerald More like counting their fees before the deal closes. But yeah, Akzo shareholders could get a nice bump.

Marie Simple: buy AkzoNobel.

Marie Hong Kong's board-lot reform will reduce the minimum trading unit for stocks like HSBC from four hundred shares, boosting retail accessibility. The SCMP says turnover should increase.

Tom HSBC is already up twenty-three percent year to date, near its fifty-two-week high, so it's not exactly undiscovered. But the reform could extend the re-rating.

Gerald Yeah, but retail flows aren't going to move the needle that much on a bank like HSBC. I'd watch it, maybe a small add.

Marie But improving market structure is always a win. I think it's a buy.

Gerald Alright, this next one is the real sleeper. The Wall Street Journal reports a quarter-trillion-dollar wave of AI-related bond issuance testing investors' limits. The investment-grade corporate bond ETF, LQD, is down one point one percent on the week and right at its fifty-two-week low.

Tom But Gerald, that's also a sign of massive AI capex. Companies are borrowing because they're building. For equities, that's bullish long term.

Marie No, but that's the risk. If the AI spending boom doesn't generate returns, these bonds become stranded. It's a double-whammy with rate uncertainty.

Gerald Spreads are already widening. If LQD breaks below that fifty-two-week low support, it signals real credit stress. Sell investment-grade bonds.

Tom But if TSMC blows out earnings on Thursday, it validates the spending. The bond market might chill. So maybe this is temporary indigestion.

Marie The bear case is real. A supply glut, peak rate uncertainty, and zero return yet. I'm with Gerald on this one — short LQD.

Tom Alright, I'll put on my hard hat. Watching that LQD level.

Marie One more: Indian companies are turning to Chinese large language models for cost savings. Nikkei Asia says Baidu is a primary beneficiary.

Tom BIDU — Baidu — is down twenty-two percent year to date, trading below book value. Price-to-book of one. If Chinese AI gains global traction, that's a contrarian cheapie.

Gerald I'm always skeptical of Chinese tech valuations, but at book value, it's hard to argue. Maybe a speculative buy.

Marie It's a small bet on Chinese AI exports. I'd put it on the radar.

Marie So to wrap: today's signals show the Iran strikes are being processed purely through a rates lens. Oil surged, bonds tanked, gold couldn't get a bid. The cleanest expression is dispersion — long USO versus short GLD. That plays the rates-over-safety dynamic directly.

Tom And the S&P 500 near its record tells you equities aren't buying the doom script. They're betting on earnings, especially tech.

Gerald But TLT is two percent above its fifty-two-week low. The short duration trade is so crowded that any hint of a data pause could cause a violent unwind. TSMC earnings on Thursday could be that catalyst.

Marie And the gaps: no one's talking about a Chinese monetary response. If the PBOC eases to offset energy costs, China large caps could rally from multi-year lows. That's a huge catalyst missing from the press.

Tom Also, if OPEC+ signals more supply, the oil rally could reverse overnight. So don't get too comfortable in USO.

Gerald And don't forget the AI bond supply trade — short LQD. That's waiting for the day credit cracks.

Marie So the play isn't one ticker — it's dispersion. Long USO, short GLD, and a side of short LQD.

Tom Exactly. Strip out the equity beta and play the macro shift.

Gerald Dispersion trade.

Marie That's the whole story.

Tom Nailed it.

Gerald As always, none of this is investment advice. Just three friends talking markets.

Marie If you're just finding us, hit follow on Spotify — or check investmentflash.com for the full digest with charts and sources.

Tom We'll be back with the New York Edition later today at nine a.m. New York time. Catch you then.