The first casualty of war is often certainty. The second, increasingly, appears to be financial markets. President Donald Trump may have declared that the memorandum of understanding with Iran is “over”, but perhaps the more relevant question is whether markets ever believed it was truly beginning.

The reaction was immediate. Oil surged more than 5pc. US Treasury yields climbed to one-month highs. The VIX jumped sharply. Global equities retreated. The dollar strengthened as investors once again sought liquidity over risk. At the time of writing, markets were also awaiting the minutes of the Federal Reserve’s latest meeting, looking for clues about how policymakers might respond if another energy-driven inflation shock complicates the outlook further.

Could all this be telling us something?

Financial markets have spent months behaving as though the Middle East now comes with an on-off switch. Ceasefire announced? Sell oil, buy equities, rotate into risk. Missile strikes resume? Buy crude, dump stocks, buy dollars. It has become almost mechanical.

Perhaps that is exactly the problem.

For years, investors spoke of the Greenspan Put, the Bernanke Put and, more recently, the Powell Put. The idea was simple enough. Whenever markets came under sufficient pressure, the Federal Reserve would eventually ease financial conditions. Investors believed there was a safety net.

Now another “put” seems to be emerging, although it works rather differently.

Call it the Hormuz Put.

The irony........

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