Rabobank’s Global Strategist Michael Every highlights that US strategic aims in the ongoing Gulf War 3 and its potential control over Middle East energy resources could significantly reshape US hegemony and the backdrop for the Dollar [1]. The report underscores a rapid move toward new US defense systems, questioning the future of NATO, and referencing lessons learned from Ukraine, with Germany’s Rheinmetall CEO recently mocking Ukraine’s military prowess [1].
Every argues that the outcome of the war will have implications far beyond oil prices and US mid-term elections. If the US emerges victorious, it would effectively control Middle East energy and could establish a new regional architecture. Conversely, if the US loses, op-eds advocating for a 'blueprint for Chinese global leadership' may prove accurate, and those relying on the 'rules-based order' would also lose out [1].
Rabobank’s geopolitical base case suggests the war could be largely resolved within 2-3 weeks on favorable terms for the US, as stated by Secretary of State Rubio to the G7. However, the report cautions that conditions may worsen before improving, and if they remain adverse, economic projections will also deteriorate [1].
On the macroeconomic front, the report points to upcoming US data releases, including March consumer confidence and February JOLTS job openings, as well as comments expected from Chicago Fed President Austan Goolsbee. These data points and official remarks may provide further insight into the US economic outlook amid ongoing geopolitical tensions [1].
CONCLUSION
Rabobank’s analysis suggests that US geopolitical maneuvers and defense shifts could have medium-term implications for the Dollar and global markets. The outcome of Gulf War 3 and upcoming US economic data releases are key factors to watch, with the potential for significant market volatility if conditions worsen. Investors should monitor both geopolitical developments and macroeconomic indicators closely.