Commentary &
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Helium, Hormuz, and the Effects

What Happened Qatar produces around a third of global helium supply. With the Strait of Hormuz closed, that helium cannot leave. But unlike oil, which can sit in storage and ship when the lane reopens, helium cannot be stored for more than 35 to 50 days. After that, pressure builds and the container vents, releasing the gas into the atmosphere permanently. The supply does not just get delayed. It is destroyed. The strikes also caused structural damage to QatarEnergy's Ras Laffan facility, where the helium is actually produced. That matters more than the shipping closure because damaged production equipment has to be physically rebuilt, not simply restarted. QatarEnergy declared force majeure and its CEO has said production will only resume once the conflict has completely ended. Industry estimates put roughly a third of global supply offline for three to five years. So even if the Strait reopens tomorrow, the helium supply does not come back with it.

What Helium Is Used For Helium is useful across three sectors because it stays liquid at extremely low temperatures and is chemically inert. In semiconductors it is used to purge equipment and cool wafers during chip production. In MRI scanners it keeps the superconducting magnets cold enough to function, and nothing else works at those temperatures. In aerospace it is used for pressurising fuel tanks and leak testing.

Alternative Suppliers and the Opportunity for Helium Producers Russia is the main beneficiary. It is the third largest producer, its helium moves overland rather than through Hormuz, and exports to China rose 60% year on year in 2025 as production ramped. It also sells cheaper. The problem is that Russian producers are largely uninvestable for Western capital due to sanctions, and exports are bottlenecked by a shortage of cryogenic containers. More broadly, helium producing companies in North America and Russia could see revenues increase significantly as they step in to fill the gap left by Qatar. This is particularly the case with Chinese companies, which are actively seeking alternative supply sources and are expected to increase purchasing from these producers. If revenues rise, these helium producing companies could also see an increase in their stock price, which is a potential opportunity for investors watching those names.

Where the Real Opportunity Sits The bigger opportunity could be in the companies that make the equipment that replaces or reduces helium consumption, rather than in helium itself. Whether helium prices stay high or eventually come down, these companies could benefit either way. If prices stay high, hospitals, fabs, and battery manufacturers may be pushed to buy new equipment to reduce their helium dependency. If prices fall, companies that have already committed to new equipment are unlikely to reverse those decisions. Around 50,000 helium-cooled MRI scanners are installed globally. Philips has a product called BlueSeal which seals a small amount of helium into the magnet at manufacture and never needs refilling. Over 2,200 units have been installed since 2018, and Philips recently launched the first helium-free 3T platform. Hospitals replacing scanners may increasingly look at these options as a way of reducing supply chain risk. In semiconductor fabs, closed-loop recycling systems can recover 90 to 95% of helium. In Japan and Taiwan, most fabs have already installed these systems. But in Singapore, fewer than half have done so, meaning there are still a large number of fabs currently using helium once and discarding the rest. With helium prices elevated, those fabs have a stronger financial reason to consider installing recycling now. That could be an opportunity for companies like Linde, Air Liquide, Air Products, and others who sell and install these systems. Another aspect is EV battery manufacturing. Every EV battery pack is helium leak tested to detect micro-cracks that could let moisture or oxygen into cells. Battery manufacturers with fixed production start dates may be forced to either pay high spot prices or delay launch. Inficon makes a leak detection platform that works on both helium and hydrogen and has a mode that could cut helium use by up to 90%.

Who Benefits Inficon sells leak detection equipment that works for both helium and hydrogen, so regardless of which gas companies move toward, they could still need Inficon's equipment. Inficon may benefit from the transition itself rather than from the outcome of which gas wins. Industrial gas companies such as Linde, Air Liquide, and Air Products could benefit as well. Firstly, with Qatari supply offline, helium becomes more scarce and prices could rise, which may mean they earn more on every unit they sell. Second, companies installing recycling systems are likely buying that equipment from these same companies, meaning they could profit from both the shortage and the solution to it. Philips, Siemens Healthineers, and GE HealthCare could also benefit through the replacement cycle in MRI, as hospitals look to replace helium dependent scanners with sealed or helium-free models. Philips, Siemens Healthineers, and GE HealthCare could also benefit through the replacement cycle in MRI, as hospitals look to replace helium dependent scanners with sealed or helium-free models.

The Main Risk One main risk is the possibility of lower demand for helium by the time production comes back online in three to five years. The shortage has pushed companies to adopt new technologies that use significantly less helium. Hospitals may have replaced old MRI scanners with models that need little to no refilling. Semiconductor fabs could have installed recycling systems that recover most of the helium they use. EV battery manufacturers may have qualified alternative testing methods. If enough of these changes have taken hold by the time Qatari production restarts, the market that reopens could be one where demand has already shifted structurally lower. That is a particular risk for helium producers, as the window to benefit from high prices may be shorter than it appears.

From Yen to Franc: The Carry Trade Migrates

What Happened with Japan and Why Japan kept interest rates near zero for roughly 30 years. With no real return on Japanese debt, investors borrowed cheap yen and put that money to work in higher yielding assets elsewhere. That was the carry trade. What changed is that inflation finally arrived in Japan, giving the Bank of Japan the justification to start raising rates and remove its cap on bond yields. Japanese government bond yields are now at levels not seen in a generation, with the 10 year at 2.77% and the 30 and 40 year both above 4%. For carry traders that changes everything. Borrowing yen is no longer free and Japanese capital now has a real reason to stay at home. Both things that made the trade work are under pressure at the same time.

Why Investors Are Now Looking for Alternatives The carry trade does not disappear just because Japan becomes more expensive. Investors still want cheap funding, so they start looking for the next best option. The trade migrates rather than dies.

Why the Swiss Franc The Swiss franc is the strongest candidate. The SNB policy rate is at 0.00% and the overnight rate is sitting at effectively negative, meaning borrowing in francs is essentially free. On top of that, the franc is deeply liquid, globally trusted, and politically stable. Not every low rate currency has that combination. It is exactly what carry traders need, and right now the Swiss franc is one of the very few currencies in the world that offers it. So the thesis is that investors begin treating CHF the way they used to treat JPY. Borrow cheap francs, sell them, convert into dollars or pounds, and deploy into higher yielding assets abroad to earn the spread.

The Knock On Effects When that borrowing and selling of CHF starts happening at scale, the first effect is that the franc weakens. All those investors converting their borrowed francs into other currencies creates consistent selling pressure on CHF in FX markets. In the short run that is actually a benefit for Switzerland. A weaker franc makes Swiss exports more competitive abroad and means the overseas earnings of large Swiss multinationals like Nestlé, Roche, and Novartis translate back into more francs when reported at home. So in the early stages of this shift, Swiss exporters see a real tailwind. There is also a broader market effect. If global investors are borrowing CHF and deploying it into US Treasuries, European bonds, and emerging market debt, that creates a new wave of demand flowing into those markets, just running through a different funding currency than before.

Risks Crowded trade unwind. Carry trades tend to feel safe and predictable for a long time, then collapse very quickly. The problem is that as more investors pile into the same trade, a large hidden short position builds up in CHF across global markets. Nobody is particularly worried while it is working. Then something happens the SNB hints at a rate rise, inflation surprises to the upside, or a broader market selloff spooks investors into moving to safety. When that trigger hits, two things happen at once. Investors around the world want to buy francs because Switzerland is seen as a safe place to park money in a crisis. At the same time, every carry trader who borrowed francs is frantically trying to buy them back to repay their loans. Both groups are buying CHF at the same moment, which sends the franc sharply higher. To pay back what they borrowed, traders are forced to sell the foreign assets they bought, whether that is US government bonds, European stocks or emerging market debt, regardless of whether anything is actually wrong with those assets. That forced selling spreads the stress far beyond Switzerland into global markets.

Reversal hurts Swiss exporters. The early stages of this trade are good for Switzerland. A weaker franc makes Swiss goods cheaper abroad and boosts the earnings of multinationals like Nestlé, Roche, and Novartis when they convert overseas revenue back into francs. But if the trade reverses and the franc strengthens sharply, all of that goes into reverse. Swiss exports become more expensive for foreign buyers, demand falls, and the overseas earnings of those same multinationals translate back into fewer francs. This could cause Swiss equities to fall in price, and the SNB may even look at cutting rates back toward negative territory as a tool to weaken the franc again.

Deal Off: Oil Prices Move Back Up

What Happened On Monday night Iran fired missiles at three commercial vessels in the Strait of Hormuz. A Qatari LNG tanker was struck and caught fire. A Saudi supertanker was damaged. The US retaliated with strikes on Iranian air defences and Revolutionary Guard boats. The US Treasury simultaneously reimposed oil sanctions on Iran in full, removing the temporary exemption that had been granted under the June agreement, effective immediately.

What It Means for Oil Brent moved back above $78 overnight. The June deal had brought it down to $70. This week reversed a large chunk of that in 48 hours. The sanctions waiver is gone and that is harder to walk back than words.

What This Reverses Everything written on 25 June now runs in the opposite direction. Oil rising means inflation reprices upward, rate cut expectations go into reverse, and bond prices fall rather than rise. The airlines trade unwinds. Safe haven assets can recover their positions as risk-off returns. The deal was the catalyst for the original position. The breakdown is the catalyst for the opposite.

The US–Iran Deal and Its Effects on Markets

The Backdrop The US and Iran signed a deal, and the key part of it was that Iran agreed to allow vessels to pass through the Strait of Hormuz without charge for 60 days. This matters because before the war, around 20% of the world's oil supply was passing through the Strait. The war had reduced that supply significantly, and at the same time a lot more energy was being consumed because of the conflict itself, which pushed demand higher. Lower supply and higher demand meant oil prices had been rising sharply. But now, with the Strait open again, supply starts to come back and prices can fall. And so we started to see oil prices decrease. There is then a chain effect. Falling oil feeds directly into headline inflation because energy sits within the inflation basket. On top of that, energy is a cost input into almost everything, including transportation, manufacturing costs, and heating. So as oil falls, costs across the economy come down with it. Falling headline inflation then brings down inflation expectations. And that is what central banks respond to. The probability of further rate hikes falls, and the expected timing of cuts gets pulled forward.

Fixed Income With interest rate hikes becoming less likely and rate expectations falling in general, we can expect bond prices to rise. Short term bonds, such as two-year bonds, are more directly linked to short term rate expectations, so they will respond the most and we can expect their prices to increase more and their yields to drop more. We can also see some broader movement across bonds in general as risk sentiment shifts and investors start moving away from safe haven bonds as the situation improves.

Equities With oil prices falling, airlines stand to benefit. Fuel accounts for roughly a quarter to a third of airline operating costs, so as fuel costs come down, earnings can improve. One sector that could potentially lose out is defence. Companies that produce war materials, whether that is missiles, air defence systems, or naval equipment of the kind used during the conflict, were benefiting from elevated demand driven by the war. As the situation moves toward resolution, that conflict premium fades and the need for those materials reduces, which can weigh on their stock prices.

Safe Havens This is a risk-on event. As the situation moves closer to resolution, investors gradually start to move away from safe haven assets. Safe haven assets include gold, US Treasuries, the Japanese yen, and the Swiss franc. These assets attract demand when uncertainty is high because investors treat them as a store of value during periods of stress. As the deal reduces that uncertainty, the premium investors were willing to pay for that protection starts to fade. Less demand means prices can fall.

Risks The 60-day window. This is not a settlement, it is a trial. Article 5 committed Iran to using its best efforts to ensure safe commercial passage for 60 days, not a guarantee and not permanent. The asymmetry is ugly: if the deal holds, oil grinds lower over weeks. If it breaks, oil gaps higher in hours.

Infrastructure damage. A significant amount of oil infrastructure will have been affected during the conflict. Oil refining facilities, which use a cracking process to break down crude oil into usable products like petrol, diesel, and jet fuel, can take a very long time to repair once damaged. So even if the Strait reopens and supply starts to flow again, if the refining capacity along the route has been damaged, the actual supply of refined products reaching markets can remain constrained for much longer than the headlines suggest.

Bank of England Rate Prediction

The Data Recent UK inflation data points to a Bank of England hold rather than an immediate rate cut. CPI stayed at 2.8%, below expectations, while CPIH remained at 3.0% and core inflation eased slightly to 2.6%. That suggests price pressures are cooling, but not disappearing entirely.

The Case for a Hold The main reason I would still expect the Bank to hold is that services inflation remains sticky at 3.7%. That matters because it shows underlying inflation is still present even as the headline rate improves. At the same time, the labour market is softening, with unemployment around 5.0% and pay growth slowing to 3.4%, which points to weaker demand and less inflationary pressure ahead.

The Outlook Overall, this feels like a mildly dovish setup. Inflation is lower than expected, the labour market is cooling, and the balance of risks is gradually shifting toward cuts later in the year. If markets begin pricing that in more aggressively, bond yields could fall and bond prices could rise.

ECB's First Rate Rise Since 2025 Lifts European Banks as Gold Slides

The ECB has raised rates for the first time since 2025, and the move keeps the policy backdrop supportive for bank earnings. Higher rates tend to lift net interest income, even if funding costs and credit risk build over time. Meanwhile gold has slipped to a six-month low, which makes sense in a stronger rate environment where demand for defensive assets fades. That combination points toward rotation into rate beneficiaries and away from safe-haven exposure.