CITIC Securities said in a July 14 research note that renewed disruption in the U.S.-Iran conflict points to a risk that the current standoff could become prolonged. The firm said fundamental flaws in the U.S.-Iran memorandum of understanding make implementation difficult, leaving both sides stuck in a situation where a stable agreement remains out of reach. In its view, the conflict could continue in a stop-and-start pattern, while passage through the Strait of Hormuz faces intermittent disruption.
The note also challenged a common market assumption tied to U.S. domestic politics. While many investors expect this year’s U.S. midterm elections to restrain war-related actions by the Trump administration, CITIC Securities argued that such expectations may be too strong. It said that as long as the likelihood of Republicans losing the Senate keeps falling, pressure on the administration over the Supreme Court, impeachment-related investigations, and election disputes would remain limited. On that basis, the brokerage said the market may be overestimating how much the midterm elections can shape the administration’s behavior.
BlockBeats reported on July 14 that CITIC Securities said in a research note that renewed disruption in the U.S.-Iran conflict has brought the issue back into focus. The brokerage said fundamental flaws in the U.S.-Iran memorandum of understanding make it difficult to carry out, leaving the current standoff exposed to the risk of becoming prolonged.
CITIC Securities said the situation could remain defined by the absence of a stable agreement, a stop-and-start pattern of war, and intermittent disruption to traffic through the Strait of Hormuz.
CITIC Securities questions market expectations on midterm restraint
The note said the market generally expects this year’s U.S. midterm elections to restrain war-related actions by the Trump administration. CITIC Securities took a different view. It said that as long as the probability of Republicans losing the Senate continues to decline, pressure linked to the Supreme Court, impeachment investigations, and election disputes would stay limited.
Based on that assessment, the brokerage said the market may be overestimating the impact of the midterm elections on the Trump administration’s behavior.
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