Group 1 - The ongoing Middle East turmoil exceeds market expectations, leading to increased global risk aversion and a rise in risk assessment. The implied geopolitical risk premium for commodities has not yet reached historical extremes, indicating potential for further price increases in commodities if Middle Eastern disturbances persist beyond expectations, which would boost price expectations in related cyclical sectors such as petrochemicals, coal, natural gas, electricity, and agriculture [5][8][19] - As geopolitical tensions rise, the geopolitical risk index is also increasing. This escalation in geopolitical risk will have two main impacts: an upward shift in inflation expectations and a downward shift in risk appetite, leading to negative impacts on global equity markets [5][12] - The direct impact of geopolitical disturbances is seen in commodities. Statistical results show that since the changes in the Middle East situation in March, commodities with a higher correlation to geopolitical risks have experienced significantly greater price increases [5][19] Group 2 - The implied geopolitical risk premium index for commodities is currently above historical averages but remains significantly below the peak observed during the 2022 Russia-Ukraine conflict. This suggests that the market has not overly priced in potential future conflicts, and if the Middle East turmoil continues to exceed expectations, commodity prices still have room for growth [5][21][24] - In the medium term, there is no need for excessive concern as the negative impact of rising geopolitical risks on stock markets in various countries is increasing, while the impact on the Chinese stock market is actually decreasing. Statistical analysis shows that the correlation between rising geopolitical risks and volatility in US stock indices is strengthening, while the impact on domestic stock index volatility is diminishing [5][12][19] Group 3 - The methodology for calculating the implied geopolitical risk premium for commodities involves four steps: 1. Rolling correlation statistics of commodity price changes against the geopolitical risk index over 12 months to identify high and low correlation commodities [20] 2. Averaging the prices of high and low correlation commodities to create two price indices, with the ratio of these indices serving as the first factor of the implied geopolitical risk premium [20] 3. Calculating the price increase diffusion index, which measures the proportion of commodities that have increased in price each month, serving as the second factor [20] 4. A weighted average of the two factors to derive the implied geopolitical risk premium index, which historically correlates with geopolitical risks [21]