The stock market doesn't fully react to global oil shocks until five whole days after they happen.
March 24, 2026
Original Paper
Oil shocks and real yield curves: Evidence from Brazilian inflation-linked bonds during the 2026 Iran crisis
SSRN · 6460807
The Takeaway
Contrary to the 'efficient market' theory that information is processed instantly, this study of Brazilian bonds found an 'echo effect' where the biggest volatility spike happens a week later. It reveals that it takes professional traders an entire week of lag time to calculate the secondary inflation effects of a geopolitical crisis.
From the abstract
This paper investigates the high-frequency transmission of the early 2026 Iran geopolitical shock to the Brazilian real yield curve. Using a daily Vector Autoregression, VAR(5), framework , we quantify the magnitude and persistence of the oil supply shock across inflation-linked government bonds (NTN-Bs). We document a non-linear maturity pattern where the short end of the curve remains insulated by domestic liquidity factors , while the intermediate segment—specifically the 2030 maturity—acts a