[MARKET ANALYSIS] USD firmer against all G10 currencies with yields rallying on continued energy upside

This is the established energy-shock playbook: strikes on shipping in the Strait of Hormuz transmit through crude and European gas benchmarks into a rates and terms-of-trade move, and the pattern in past episodes has been a bid for the dollar as both safe haven and relative energy self-sufficiency trade, with the energy importers' currencies (EUR, GBP, CEE) bearing the brunt. The distinguishing feature here is that the channel is running through yields rather than pure risk aversion, which historically has been the stickier variant for the dollar; risk-off flows fade quickly when tanker incidents prove isolated, while an energy-driven rate repricing persists as long as benchmarks stay elevated. The gilt leg is its own case: a 10-year trading well above the fiscal watchdog's assumption revives the debt-sustainability framing that has periodically turned UK yield spikes from sterling-supportive to sterling-negative, the split hinging on whether higher yields read as growth or as fiscal risk. The immediate tells are whether the Hormuz incidents escalate to insurance and freight repricing or remain one-off, and whether the dollar bid survives a soft payrolls print, since data-driven reversals of geopolitically-driven dollar rallies have been the norm when the underlying event does not escalate. On the euro side, hawkish repricing of the central bank has historically cushioned but not reversed the currency in energy-led moves.