Investing.com -- Oil prices have risen again amid renewed tensions in the Middle East, but HSBC’s Chief Multi-Asset Strategist, Max Kettner, said this escalation does not change the bank’s bullish view on risk assets.

Kettner stated that its view on risk assets "is not affected by this renewed escalation," pointing instead to the Q2 earnings season as a more important driver.

The firm noted that despite high consensus expectations for the U.S., sequential quarter-over-quarter earnings growth expectations remain low, with U.S. banks having "got off to a good start."

HSBC maintains its broadening theme, favoring an overweight on the Eurozone, though it cautioned that continued momentum unwind "should spell more trouble for US small caps in the coming weeks."

Kettner stated that the bank’s sentiment and positioning framework "doesn't yet point to any sell signal," with systematic investor positioning remaining "just about neutral." He added that its framework for U.S. Treasuries is "moving closer to a buy signal."

On oil, HSBC noted that sudden escalations have historically unwound quickly and said the renewed tensions don't change the near-term supply glut, adding that the firm remains "heavily UW oil" in its asset allocation.

HSBC noted that the renewed tensions do affect its view on rates, as front-end relative value "still essentially trades like an oil-proxy," reinforcing its overweight position in gilts.

The bank also pointed to the downside surprise in June's U.S. inflation print as a potential "first sign of US exceptionalism unwinding" in the second half of the year.