‘Mr. Brexit’ Strategist Made Winning Calls as Iran War Erupted

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(Bloomberg) — Jordan Rochester earned the nickname “Mr. Brexit” for his prodigious market insights on the UK’s split from the European Union. Almost a decade later, his quick thinking as hostilities erupted in the Middle East has spurred another slew of profitable trading ideas. 

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Rochester, now a macro strategist at Mizuho Bank, saw big market-disrupting implications as soon as the US-Israeli assault on Iran began some four weekends ago. By the time trading started the following Monday, he was flipping his calls — shifting from a recommendation to go long UK interest-rate futures to shorting them instead, while also advising clients to sell the euro against the dollar and buy inflation protection in Europe as oil began to surge. 

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“We had to get out of all of those trades,” Rochester said in an interview, regarding the about-face in his recommendations. “I just said to my team, ‘Sell them all, get out, do the opposite.”

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The strategist, working with colleagues Evelyne Gomez-Liechti and Masayuki Nakajima, had quickly concluded that the threat to energy supplies and resulting oil shock would be severe enough to potentially force central banks to raise rates to contain inflation — a stance not reflected in markets. That early call proved prescient as well as lucrative for those who followed his advice: A month into the war, traders have swung from pricing in two UK interest-rate cuts this year to nearly three hikes, a dramatic turn that fueled one of the biggest bond selloffs in years. 

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Rochester’s quick flip stands out at a time when investors who had built up bets on rate cuts were caught off guard, leaving prominent hedge funds, including Brevan Howard, nursing losses. For those who followed Mizuho strategist’s advice, the trades are paying off, even as gilts and other government bonds have retraced some of their losses. 

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To be sure, Rochester isn’t the only one who could foresee that oil disruptions would complicate the picture for inflation and rate expectations, particularly in Europe and the UK. But his early calls helped clients potentially limit losses and take advantage of the market moves that only got more severe as days went on. 

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“He propped a short front-end rates trade early in March – nice call,” said James Athey, a portfolio manager at Marlborough Investment Management. “He’s an independent thinker.”

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Some big bond investors are focused more on growth risks from the conflict, which could eventually lead to lower policy rates and bond yields. For now, Rochester and his team are sticking to their bearish stance. On Friday, his team even doubled down on their view, adding a short Japanese interest-rate recommendation.

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Rochester, 35, began his career as a currency analyst at Nomura International Plc in 2013 after interning at the bank while studying economics at the University of Bath. During the UK’s messy exit from the EU, Rochester became “Mr. Brexit” to colleagues and clients for his analysis of how each twist in the saga would hit the markets. He churned out hundreds of research notes and correctly foresaw how the pound would fall as a result. Rochester joined Mizuho in 2024 as the head of macro strategy in Europe, the Middle East and Africa.