BNP Paribas warns that the Middle East conflict will slow global growth and fuel inflation

BNP Paribas’ global outlook warns that the Middle East conflict will dampen global growth and keep inflationary pressures elevated even if hostilities ease soon. The bank sees heightened energy and commodity prices, persistent inflation risk and a potential prolonging of tighter central-bank policy — a negative mix for cyclical equities and growth-sensitive markets. European indices, including France 40, may be particularly vulnerable to a growth slowdown and higher input costs, while investors could shift toward safe-haven assets and inflation hedges. Overall the note implies increased market volatility, pressure on risk assets and a more challenging macro backdrop for policymakers and investors.