Fu Peng comments on expectations versus reality in macro trading—taking the Middle East geopolitical conflict as an example [Fu Peng Talks 24]

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Expectations and Reality in Macro Trading—with the Middle East Geopolitical Conflict as an Example

Observing the world at the trading desk—Fupeng Says comments on finance and economics. This video was recorded on April 15, 2026.

Previously, I discussed macro trading issues in the context of the Middle East war, making it clear that the Hormuz Strait event will show a recurring pattern. The event itself is cyclical. Under this circumstance, the reasonable strategy is not left-side early entry, but right-side deployment—wait until the event fully materializes and then take action.

Furthermore, there is another core issue in the current market—the need to clarify the boundary between expectations and reality of the event. The reason we're presenting this content now is that most market participants are paying attention to the Iran negotiations. Though consensus hasn’t been reached, the process is repeatedly advancing, and the market is confused about whether to use the left-side or right-side strategy. Moreover, reviewing a month ago, at the outbreak of the Iran conflict in early March 2026, asset performance across the market has significantly diverged. From a market perspective, some assets have already seen notable corrections: Bitcoin has rebounded to pre-conflict levels, but overall trends remain sideways; oil prices haven’t fallen back to their early March levels, and the gap is clear. Spot and futures prices (including WTI, Brent, etc.) are still fluctuating at elevated levels.

Specifically, assets that have recovered to early March levels include: 1) Market volatility sentiment, basically restored to pre-conflict status; 2) Core assets in the stock market, especially AI industry chain core assets, now back to pre-conflict levels, while non-core assets—valuations under pressure (software assets, etc.)—have not rebounded; 3) Copper prices, now back to pre-drop levels; 4) On the FX side, the US Dollar Index is also roughly back to early March status.

Regarding asset performance, a particular point of caution: If you only observe those assets that have recovered, it’s easy to misjudge the event as “over”—such a judgment is essentially only based on market expectations. Previously, we noted that from a liquidity perspective, the impact of this month-long geopolitical conflict can be summarized as P+Q: The Q-factor of valuation pressure persists regardless of the Iran issue, while the Iran-driven P-factor’s elasticity disappeared.

From this logic, if you believe the event is over, it means P-factor elasticity has recovered, but Q-factor tightening still persists. The overall situation is less severe than when both P and Q were tight, but the elasticity has partially returned, and Q-factor valuation pressure is not relieved. This is evidenced by asset prices: Bitcoin and AI software assets haven’t returned to pre-Iran event levels, showing Q-factor tightening remains; core assets driven by P-factor elasticity, which fell due to dual tightening, are now basically recovered—this confirms the judgment. Moreover, the market is not in a P-and-Q double-loose scenario; if it were, Bitcoin’s reaction as a liquidity-sensitive asset would be much more intense, which further supports the current logic.

Next, analyzing the difference between expectations and reality from the perspective of oil prices. This morning, I published a short commentary—core point: After repeated tugging by the event, the market shows obvious fatigue, similar to the market behavior during the Russia-Ukraine crisis. Whether conflict continues or negotiations progress, emotional market swings are gradually fading. In the commentary, I pointed out that as events repeatedly tug, market sensitivity to expected sentiment will continue to decline—not the so-called “Taco” effect, but because the repetitive nature of the event breeds adaptation among participants; regardless of negotiation swings (like weekend reversals), market sentiment can hardly fluctuate dramatically anymore.

Still, I must emphasize: From the event-driven logic, this repetition brings the first wave of emotional amplification followed by gradual fade—all based on market expectation. However, a key issue is now widely overlooked: the real impact, which I’ve repeatedly stressed as the “40-day” node in my live broadcasts. This node is now reached. It means the negotiation repetition may last another week (with repeatedly announced negotiation messages, lack of consensus, etc.). The Trump administration’s penchant for negotiation tugging may continue, but amid this, “navigation” remains a lagging real problem. If after 40 days, navigation remains unresolved, the real impact will gradually emerge—currently ignored by most market participants focused only on sentiment, neglecting the core real contradiction.

The current market state can be interpreted as: fading sentiment led to restored P-factor elasticity at the intermediate level, with corresponding asset composition characteristics. Looking at asset movements from early March to April 14, 2026, observing which assets returned to early March levels lets you judge the relative influence of each factor: Which assets are driven more by P-factor elasticity, which are under more Q-factor pressure, and which are mostly affected by expectation and sentiment. This confirms our previous view: If event repetition weakens sentiment and expectations continuously, the impact spreads to core assets—this wave of spillover is now basically done.

Lastly, another reminder: Do not ignore real impact, which is widely underestimated. If the event’s repetitive time is short (e.g., 10 days, 20 days), sentiment and expectation fade only lead to limited real world effect. But this event has lasted longer, and daily oil supply continues to drop—by as much as 10 million barrels per day, as little as 8 million. This ongoing "blood loss" is now affecting refineries. As said before, once refinery equipment stops, recovery is extremely difficult; currently refineries can only maintain operation by reducing efficiency.

If time (t) is the main variable, the longer the duration, the more obvious the real world impact and damage. For the market, prolonged time means real impact cannot be ignored, and this steady “blood loss” will shift the market from emotional swings to quantitative evaluation of real impact. Also, the transmission speed of real impact is much slower than that of emotion—emotional response is rapid and fades quickly, while real impacts are slow to manifest. The core variables now are "navigation or not" and "duration", and real world variables will pass through to P-factor, affecting asset movement: as long as assets can hold current levels, P-factor elasticity will gradually recover.

This logic is cyclical. The impact logic of geopolitical events is similar to that of the pandemic: Early lockdowns and later reopenings quickly spread market sentiment; after 2021, renewed lockdowns led participants to adapt to home testing and controls, while the pandemic’s true economic impact revealed itself slowly over the next year or two. This is exactly the same as the current Iran problem and the market logic.

The above summarizes the latest analysis following last episode, to share with everyone. We've reached a key time node, and the analysis is worth deeper discussion.

Risk Warning and DisclaimerThe market has risks; investments require caution. This article does not constitute individual investment advice and does not take into account any user’s special investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions here are suitable for their situation. For investments based on this article, you are responsible for the outcome. ```