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Futures At Session Highs After Oil Drops Below $100 On India Hormuz Transit Hopes
Futures At Session Highs After Oil Drops Below $100 On India Hormuz Transit Hopes
US stock futures rebounded from their overnight selloff, and were trading near session highs after three days of losses on Wall Street as Brent slipped below $100 a barrel and investors waited to see if the war in the Middle East would escalate further. The catalyst for the bounce was news that India asked Iran to allow its tanker armada through Hormuz, which would lead to a substantial easing of the global oil shipping blockade. And while it remains to be seen if this will pave the way for other flows through the strait, for now futures have rebounded with Emini S&P futures up 0.3% at 6700 and Nasdaq futures rising 0.4%; in premarket trading Mag 7 stocks are flattish except for the -1.4% decline in META after it delayed the rollout of its new frontier model “Avocado.” Bond yields reverse an earlier rise and were flat higher this morning while the USD is 0.4% higher, with DXY now reaching above 100. Oil prices drop overnight with WTI trading around $93 after India stated it has an oil tanker moving out of the Strait of Hormuz. Other commodities are mixed: Aluminum added 1.7%, Silver fell -1.0% this morning. US economic data slate includes January personal income/spending, PCE price index, durable goods orders, 4Q second GDP estimate (8:30am), March University of Michigan sentiment, January JOLTS job openings (10am).
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In premarket trading, Magnificent Seven are mixed (Tesla +0.9%, Alphabet +0.9%, Nvidia +0.8%, Apple +0.3%, Amazon +0.3%, Microsoft +0.1%, Meta Platforms (META) -1%)
Adobe (ADBE) falls 7% as Chief Executive Officer Shantanu Narayen will resign from his position amid deep skepticism about the company’s ability to thrive in the AI era.
EverCommerce Inc. (EVCM) drops 21% after the management software firm reported adjusted earnings per share for the fourth quarter that missed the average analyst estimate.
KinderCare Learning Cos. (KLC) declines 31% after the childhood education company provided a disappointing 2026 earnings outlook.
Klarna Group (KLAR) rises 7% after the fintech’s chairman bought 3.47 million shares worth about $50 million between March 3 and March 11.
ServiceTitan (TTAN) falls 5% as the software company reported fourth quarter results. Bloomberg Intelligence says the results ran up against high expectations.
Once Upon a Farm PBC (OFRM) drops 14% after the organic kids snacks maker forecast slowing sales growth in 2026 in its first earnings report as a public company.
PagerDuty (PD) falls 12% after the software company gave a revenue forecast that’s weaker than expected.
PAR Technology (PAR) falls 22% after pricing a private offering of $250 million aggregate principal amount of 4% convertible senior notes.
SentinelOne (S) falls 4% after the software company’s outlook was seen as unimpressive.
Ulta Beauty (ULTA) drops 7% after the cosmetics retailer offered guidance for the current year that was toward the low end of Wall Street’s expectations.
In corporate news, Adobe shares fell more than 8% in premarket trading after the maker of software for creative professionals delivered a lackluster forecast and announced its long-standing CEO Shantanu Narayen would step down amid deep skepticism about the company’s ability to thrive in the AI era. And Apple is lowering the fees it collects from app developers in China, a major concession in a hugely lucrative market where
Nearly two weeks into the war in the Middle East, investors are struggling to find havens as bonds fall alongside equities and hopes for further policy easing fade while stagflation risks mount. There were a few new articles on Iran, pointing to the oscillating narrative between US off-ramp and the closure of the Strait. A global equity index was set for a second week of losses, having fallen from record highs hit before the conflict. A key sentiment indicator compiled by Bank of America Corp. showed the recent selloff hasn’t yet created conditions for investors to buy beaten-down securities.
“Markets have sailed through the last quarter with an optimistic bias, sticking to a buy-the-dip mantra, but this spike in volatility is likely to put an end to this,” said Benoit Peloille, chief investment officer at Natixis Wealth Management. He added that even if the conflict doesn’t last much longer, “it may already have a palpable negative impact on economic growth and inflation.”
Oil prices are now more than 60% higher than at the start of 2026, shrugging off coordinated moves by wealthy nations to release crude reserves and temporary US waivers allowing purchases of Russian oil. Crude could exceed the 2008 peak close to $150 a barrel, should flows via the Strait of Hormuz remain depressed through March, Goldman Sachs Group Inc. warned.
As energy price pressures build, the risk of an inflation shock is trumping the traditional appeal of bonds as a haven. Treasuries volatility jumped to a nine-month high, yields are marching higher across the curve and markets are no longer fully pricing in even one quarter-point rate cut by the Fed this year. Higher yields are exacerbating already elevated concern about stress in the private credit market, hurting risk appetite generally and the banking sector specifically.
Investors will turn their attention to US inflation figures due later Friday. The Federal Reserve’s favored price gauge is expected to show inflation remaining stubbornly high. Meanwhile a preliminary March survey will show how American consumers view the impact of the Iran conflict, given the rise in gasoline prices.
“Inflation is actually ramping up as a big risk,” Tracy Chen, a portfolio manager for global fixed income at Brandywine Global Investment Management, said on Bloomberg Television. “Duration of the conflict is key. We have been raising US dollar weighting a little bit just to increase our hedge.
European stocks are off well their worst levels, with the Stoxx 600 almost back to flat for the day having lost over 1% at the lows. A pullback in energy prices helped with European natural gas futures falling more than 1%. BE Semiconductor is the day’s most significant outperformer, after reports about takeover interest. Here are the biggest movers Friday:
BE Semiconductor shares surge as much as 14% in early Friday trading after Reuters reported that the semiconductor equipment firm has been fielding takeover interest
Zalando rises as much as 6.4%, building on yesterday’s result-driven gains and trading at a five-week high, after being upgraded at Bernstein. Analysts believe the risk-reward profile is more balanced
Worldline shares gain as much as 46% after the payments company launched a capital increase. Heavily targeted by short sellers, the stock gets a boost when shareholders participating in the rights offering recall the shares back
Siltronic shares rise as much as 3.3%, building on Thursday’s gains after the silicon wafer manufacturer reported results. Analysts at Oddo BHF raised their price target on the stock this morning as well
Medacta climbs as much as 6.5%, the most since the end of July, after the Swiss medical-implant firm reported its full-year results and raised guidance
Webuild drops as much as 6% after BNP Paribas downgraded the stock to neutral from outperform, citing the Italian construction company’s outlook for flat sales in 2026 along with slower growth in the Middle East
ID Logistics shares drop as much as 9.7%, extending yesterday’s result-driven losses and slumping to a fresh 11-month low. TP ICAP trimmed its target price on the stock this morning
Hours after Deutsche Bank flagged a €26 billion ($30 billion) exposure to private credit on Thursday, the head of structured credit at Dan Loeb’s Third Point said the hedge fund is readying to scoop up credit assets others are selling to raise liquidity. “This is probably one of the most exciting times to be a credit investor,” Shalini Sriram said on the latest Bloomberg Intelligence Credit Edge podcast.
Earlier in the session, Asian stocks fell on Friday, notching a second-consecutive weekly decline as the Iran war stokes concerns of elevated oil prices and the impact on inflation. The MSCI Asia Pacific Index slid as much as 1.4% Friday, with chipmakers TSMC, Samsung and SK Hynix the biggest drags. India and South Korea led a broad regional decline, while Indonesia’s benchmark entered a bear market.
Investors remain concerned about tight energy supply, with oil trading above $100 a barrel. A prolonged war could hobble manufacturing and drive up costs, and faster inflation may drive more hawkish monetary policy.
In FX, the Bloomberg Dollar Spot Index rises 0.4% to a year-to-date high. The pound is among the weakest of the G-10 currencies, falling 0.6% against the greenback after the UK economy unexpectedly failed to grow in January. The yen is flat having earlier dropped to its lowest since July 2024.
In rates, Treasury futures ticked higher as oil prices dipped in early US session after India said it had an oil tanker that has started moving through the Strait of Hormuz. Yields flipped to slightly richer on the day across front and belly of the curve, ahead of a day packed with US data including GDP, PCE and JOLTS job openings. US yields richer by around 1.5bp across front and belly of the curve, slightly cheaper across the long-end, steepening 2s10s and 5s30s spreads by 1.5bp and 2bp on the day, unwinding a small portion of Thursday’s aggressive flattening move as Fed rate cut premium eroded from the front-end of the curve. European government bonds also recovered as traders trimmed bets on tightening by the European Central Bank and Bank of England this year. UK and German 10-year borrowing costs are flat. US 10-year yields rise 1 bp to 4.27%.
In commodities, WTI futures lower on the day by around 2%, dropping following the India headline, after rising as high as $98 a barrel on Friday after a 9.7% jump on Thursday as defiant tones from Trump and Iran’s new leader Mojtaba Khamenei drained optimism about any swift resolution to the conflict. Betting on Polymarket puts the chance of a ceasefire by the end of the month at just 21%. Spot gold edges higher while silver drops over 1%. Bitcoin climbs 3%.
Today's US economic data slate includes January personal income/spending, PCE price index, durable goods orders, 4Q second GDP estimate (8:30am), March University of Michigan sentiment, January JOLTS job openings (10am)
Market Snapshot
S&P 500 mini +0.3%
Nasdaq 100 mini +0.4%,
Russell 2000 mini +0.3%
Stoxx Europe 600 -0.2%,
DAX -0.5%,
CAC 40 -0.6%
10-year Treasury yield unch basis point at 4.26%
VIX -0.3 points at 27.02
Bloomberg Dollar Index +0.3% at 1213.01,
euro -0.5% at $1.1456
WTI crude little changed at $95.76/barrel
Top Overnight News
Arab diplomats trying to find a diplomatic path out of the war now being waged by the U.S. and Israel against Iran say Tehran, emboldened by its ability to rattle the global economy by choking oil shipments, has laid out steep preconditions for any return to talks. WSJ
Iran has started laying mines in Hormuz and is utilizing thousands of small boats in the country’s navy to do so. NYT
Israeli officials now assess that Iran’s ruling regime is unlikely to fall in the immediate future, as Tehran’s battered rulers remain in control and conditions on the ground aren’t yet ripe for a popular uprising, people familiar with the matter said. WSJ
Donald Trump warned Iran to “watch what happens” today in a social media post, claiming the US is “totally destroying” Iran militarily and economically. Benjamin Netanyahu said regime change can’t happen without an internal uprising. BBG
The US expanded a short-term waiver allowing buyers to purchase Russian oil already in transit, potentially freeing up about 19 million barrels of crude and refined products in Asian waters. BBG
The framework for US President Donald Trump’s summit with China’s Xi Jinping is set to be mapped out this weekend as negotiators meet to discuss thorny issues such as tariffs, fentanyl and Taiwan. Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer and China’s Vice Premier He Lifeng will convene in Paris on Sunday and Monday to map out deliverables for the leaders’ summit slated for March 31 to April 2 in Beijing. BBG
US Secretary of State Rubio will join US President Trump during his trip to China later this month.
TikTok’s Chinese parent, ByteDance, is assembling computing power with high-end Nvidia chips outside China to fuel its ambition of becoming a global artificial-intelligence leader. WSJ
India is delaying signing a deal with the US for several months after new investigations, Reuters reported. New Delhi had originally aimed to finalize an interim deal this month. BBG
Adobe CEO Shantanu Narayen is stepping down after 18 years amid concerns about the company’s ability to compete in AI. Shares are down -8% in the premkt. BBG
A more detailed look at global markets courtesy of Newsquawk
APAC stocks were mostly subdued with the region cautious amid headwinds from the recent double-digit surge in oil prices after Iran's new Supreme Leader dug in and called for a continued closure of the Strait of Hormuz, as well as warned that other fronts will be opened if the war persists, while the US also initiated 60 Section 301 investigations related to failures to take action on forced labour. ASX 200 traded indecisively as strength in financials and energy offset the losses in mining and materials. Nikkei 225 underperformed as oil and inflationary-related pressures weighed on the large exporting industries, including tech and autos, with Honda among the worst hit after it cancelled three planned EV launches in North America and revised its FY25/26 outlook to a loss of as much as JPY 690bln from the previous guidance of JPY 300bln profit. Hang Seng and Shanghai Comp were lacklustre in rangebound trade with a lack of conviction heading into talks between US Treasury Secretary Bessent, USTR Greer and Chinese Vice Premier He Lifeng in Paris beginning on Sunday.
Top Asian News
Japanese Finance Minister Katayama said prepared to take all necessary steps on FX and are in closer contact with US authorities on FX.
South Korea could reportedly see KRW 20tln extra budget on chip boom, according to Chosun.
European bourses (STOXX 600 -0.2%) continue to trade on the softer side as energy prices remain at elevated levels. Once again, the IBEX 35 (-0.2%) is the worst performer as Banks continue to weigh on the index. The FTSE 100 (-0.1%) is also under modest pressure, after the UK showed no growth M/M in January. European sectors are mixed, with Energy (+0.8%) outperforming as Brent holds above USD 100/bbl. Basic Resources (-1.2%) lags as the stronger dollar weighs on metals prices. Consumer Products and Services (-1.4%) and Banks (-0.7%) are also underperforming as higher inflation expectations and poor growth prospects weigh on the sectors. For the semiconductor space, BE Semiconductor has reportedly been fielding takeover interests and has refused to respond to the rumour.
Top European News
UK GDP YoY (Jan) Y/Y 0.8% vs. Exp. 0.9% (Prev. 0.7%, Low. 0.8%, High. 1.0%).
UK GDP MoM (Jan) M/M 0.0% vs. Exp. 0.2% (Prev. 0.1%, Low. 0.1%, High. 0.3%).
UK Balance of Trade (Jan) 3.922B vs. Exp. -6.2B (Prev. -4.340B).
UK Goods Trade Balance (Jan) -14.45B vs. Exp. -22.2B (Prev. -22.72B, Low. -23.3B, High. -21.2B).
FX
DXY is stronger this morning and currently just off best levels, within a 99.58-100.29 range; upside today lacked a fresh fundamental driver, but came alongside the strength in crude prices, where Brent once again topped USD 100/bbl. Interestingly, the USD-Brent correlation is currently 0.91. On the oil situation, the US issued a new Russia-related general licence permitting the sale of Russian crude oil – this only applies to oil in transit. A waiver which did little to cull the upside in the oil complex, given this does not nearly replace the lost supply from the Gulf. ING writes that “we cannot see investors wanting to fight this dollar rally, given there is so little certainty as to when this crisis will end”. Focus now turns to Core PCE Price Index (Jan), Durable Goods Orders (Jan), Personal Spending (Jan), JOLTS (Jan), University of Michigan Consumer Sentiment Prelim. (Mar) and Atlanta Fed GDP.
EUR has now sunk below the 1.1500 mark, and made a trough at 1.1433 – levels not seen since early August, where the single currency made a low at 1.1391 (1 Aug). Ultimately, the region's status as a net-importer of oil continues to weigh on the single currency. In the meantime, focus will be on any hints of government intervention to ease the impact of higher energy costs, before focus then turns to the ECB next week, where the Bank is likely to raise concerns about the Middle East situation, with an outside chance that it signals possible policy adjustments.
GBP also remains pressured alongside peers. Sterling opened lower, given the USD strength, but then reacted negatively to the region’s GDP metrics, which showed that the UK stagnated in January, even before the Iran war started. Cable fell from 1.3315 to 1.3306 within a couple of minutes, before trundling lower as the USD strength picked up. The impact on the BoE following this data will likely not be impactful on policy in the near term, given the Iran war.
JPY remains the only G10 flat vs USD. Potentially a function of traders seeing the possibility of near-term intervention/rate checks as USD/JPY sits firmly in the intervention zone, beyond 158.00. Overnight, Finance Minister Katayama said that they are in closer contact with US authorities on FX, and separately commented that they are prepared to take all necessary steps on FX. As a reminder, the NY Fed conducted a rate check on USD/JPY back in January. As mentioned previously, intervention seems unlikely given a) it would prove to be ineffective given the current geopolitical environment, b) low volume short positions on the JPY, c) the move is fundamentally driven by higher energy prices, and d) the recent lack of verbal intervention suggests potentially a higher bar for USD/JPY to rise. Nonetheless, markets will be cognizant of any jawboning heading into the BoJ meeting and wage negotiations next week.
Trade/Tariffs
USTR confirms to start 60 Section 301 investigations related to failures to take action on forced labour.
China's MOFCOM said US 301 tariffs violate WTO rules, urges the US to correct wrong practices and return to dialogue. China is analysing and assessing the situation. Will take necessary measures to safeguard legitimate rights and interests.
China's MOFCOM is to impose tariffs of up to 30.1% on imports of rubber from Japan and Canada, effective March 14th.
US ambassador to India said they're moving to a critical stage of finalising critical minerals agreement, adds expect countries we have made deals with to honor those deals.
Fixed Income
A choppy start to the day with benchmarks in narrower ranges than usual, though still posting a c. 50 ticks band for Bunds, for instance. Action this morning has largely been a function of energy and, by extension, the general risk tone. A grind higher in the first few hours in energy benchmarks to a USD 98.09/bbl peak for WTI sparked a bout of fixed downside, equity pressure and USD strength.
However, the move in fixed income has pared with benchmarks marginally firmer as energy wanes from best. The main headline update amidst this was Axios reporting that US President Trump told the G7 on Wednesday that Iran was close to surrender; however, commentary from the new Supreme Leader on Thursday and Iran announcing a fresh wave of attacks today somewhat disputes that assessment.
Specifically, USTs in a 111-12 to 111-20 band, currently firmer by a tick or two in that. Nonetheless, the benchmark is set to end the week lower by around a full point.
For Bunds, they are yet to make a lasting move into the green, despite hitting a 126.18 peak with gains of two ticks briefly. Drivers much the same as above. Furthermore, the benchmark is also set to end the week lower by around a full point.
Finally, Gilts opened lower by just under 20 ticks today before slipping to a 88.49 low and then rebounding to near-enough unchanged. Downside a function of the benchmark catching up to post-close action and the morning's initial energy move. However, this was somewhat offset by the morning's data showing the UK started the year with no growth. A series that may have otherwise cemented a March cut by the BoE. However, the recent Middle East related energy disruption and associated moves mean a near-term cut is entirely off the table, though the MPC will likely remain divided next week in another split decision.
Japan sold JPY 300bln in 10yr Climate Transition Bonds b/c 3.42 (Prev. 3.56).
Commodities
WTI and Brent futures are off their best and worst levels at the time of writing, with traders gearing up for another week of geopolitical risks as the war shows no signs of abating. It was reported that the US issued a second short-term waiver allowing buyers to receive Russian oil already at sea, expanding a previous India-only authorisation without materially benefiting the Russian government. Modest downticks were seen in the complex following an Axios report that US President Trump told G7 leaders in a virtual meeting Wednesday that Iran is "about to surrender," according to three officials from G7 countries briefed on the contents of the call, although the report caveats that 24 hours later after that call, Iran's new supreme leader issued his first public statement vowing to keep fighting. WTI resides in a USD 94.52-98.09/bbl range and Brent in a 99.51-102.75/bbl range. Nat Gas prices are flat at the time of writing, but remain above EUR 50/MWh amid the ongoing energy woes emerging from the Iranian crisis.
Spot gold rose above USD 5,100/oz overnight and hovers on either side of the figure in recent trade, but still remains on track for a second weekly decline, as the Middle East conflict keeps oil near USD 100/bbl and in turn pushes up the USD (DXY north of 100) amid inflationary woes. Spot gold resides in a USD 5,061.32-5,128.47/oz. Spot silver resides closer to weekly lows after finding resistance at USD 90/oz on Tuesday.
In terms of base metals, 3M LME copper is on a softer footing amid the firmer USD and with sentiment also dampened as the US opened a Section 301 probe into forced-labour practices across 60 economies, including the EU, China, Japan, South Korea, Canada, Mexico, India, Taiwan and the UK. Iron is set for its biggest weekly gain in more than a year after China state-backed buyers expanded restrictions on BHP Group (BHP AT) products.
India asks Iran to allow tankers through the Strait of Hormuz, according to the WSJ; India is in active talks to allow 23 tankers through the Strait, with first crossing expected this weekend
Kremlin envoy Dmitriev said US sanctions waiver affects around 100mln barrels of Russian oil.
US has issued a new Russia-related general license permitting the sale of Russian crude oil and petroleum products loaded on vessels as of March 12, according to the Treasury website. US license permits sale of such Russian crude oil and petroleum products until 12:01 AM EDT on April 11th.
US Treasury Secretary Bessent clarified that new general licence applies only to Russian oil already in transit and will not provide significant financial benefit to the Russian government.
EU Commission said gas storage filling levels in the EU remain stable and oil stocks are at a high level, via statement; gas storage should not be refilled at all costs.
Japan's Defence Minister Koizumi said it would be possible to provide escort for Japanese ships through Hormuz, however PM Takaichi clarified that no decisions have been made.
Saudi Aramco offers to sell 2 mln barrels of Arab Light crude for March loading at Yanbu port.
Australia's energy minister announces lowering minimum stock obligations for diesel and fuel. said: To address fuel supply chain disruption by reducing up to 20% of the baseline minimum stockholding obligation for petrol and diesel, which would allow the release of up to 762mln litre of petrol and diesel from Australia's domestic reserves.
Venezuela and Repsol (REP SM) signed strategic agreements, while Venezuela's interim president Rodriguez said that the deal can make Venezuela a gas exporter.
Rio Tinto (RIO AT) suspends all mining operations at its Kennecott copper facility following a fatal incident.
Goldman Sachs expects Brent crude prices to average over USD 100/bbl in March and USD 85/bbl in April, while it sees Brent crude gradually easing back to the low USD 70s late in the year.
Geopolitics
NATO intercepts an Iranian missile targeting Turkey, the 3rd occasion since the Middle East conflict began. Missile was launched from Iran and destroyed by defences in the eastern Mediterranean.
US President Trump told G7 leaders in a virtual meeting Wednesday that Iran is "about to surrender," according to three officials from G7 countries briefed on the contents of the call, Axios reported.
US has burned through ‘years’ of munitions since the Iran war began, while the rapid depletion of stockpile including Tomahawk missiles raises pressure on US President Trump regarding the cost of the war, according to FT.
US officials say Iran has begun laying mines in the Strait of Hormuz as of today, according to NYT.
US Treasury Secretary Bessent said we know that Iran has not mined the Strait of Hormuz, noted a lower oil price regime over the medium-term after the conflict.
US weapons package for Taiwan could be approved after US President Trump's China trip, according to sources.
Israeli Security Official said that Iran has around 150 missile launch platforms, these will continue to be targeted.
Israeli army said it has begun a wave of air strikes targeting government infrastructure in Iran’s capital, Tehran, Al Jazeera reported.
Israeli air strikes are underway in Iran and explosions were reported in Tehran.
Israel's army identified missiles launched from Iran and defence systems were activated to counter threat.
Israel conducts a series of raids on southern suburbs of Beirut.
Israeli army issues orders to evacuate areas in the southern suburbs of Beirut, Sky News Arabia reported.
Iran announces a fresh wave of attacks on US bases and Israel, ISNA reported.
"Iranian state television reported a large explosion in a Tehran square where demonstrations are happening", via AP's Gambrell.
Iranian missile successfully hits target after Israeli interceptors failed to stop it.
Iran claims responsibility for shooting down US refueling plane, said US refueling plane was downed with all crew killed in Western Iraq, according to Tasnim.
US event calendar
US economic data slate includes January personal income/spending, PCE price index, durable goods orders, 4Q second GDP estimate (8:30am), March University of Michigan sentiment, January JOLTS job openings (10am)
DB's Jim Reid concludes the overnight wrap
Without putting too much of a downer on things, today marks the first occurrence of successive monthly Friday the 13ths since 2015. Thanks to a client with an impressive archive, I was sent the EMR from the last time I commented on this—11 years ago today. I wouldn't have known otherwise. The next back-to-back Friday the 13th doesn’t arrive until March 2037. I have mixed feelings about whether I’d like to still be writing about that particular statistic when it comes around again, especially as the EMR will be exactly 30 years old at that point.
Perhaps back-to-back Friday the 13ths will reverse the usual superstition and bring a bit of luck instead—something markets could certainly use when conditions are becoming ever more fraught. The challenge for investors is that a sharp turnaround could materialise at almost any point if both sides de escalated. There are obvious incentives to do so. However, there are currently no signs that such an outcome is imminent. Our house view, articulated by Helen Belopolsky in my team, is that events are likely to get worse before they get better, although de escalation remains plausible at some point over the next few weeks.
Over the past 24 hours, we’ve seen another round of escalatory rhetoric from both sides, which pushed Brent crude (+9.22%) back up to $100.46/bbl, the first time it’s closed above $100/bbl since August 2022. We’re still hovering around those levels overnight, with Brent at $100.11/bbl this morning. While it remains feasible that the most intense phase of the conflict ends relatively quickly, concerns are clearly growing that this will turn into a much more prolonged confrontation. Indeed, that uncertainty reignited inflation fears yesterday, leading to the most hawkish central bank pricing of the year so far for both the ECB and the Fed. Sovereign bonds sold off again, with 10yr bund yields (+2.5bps) reaching a post 2023 high of 2.95%. And in turn, those geopolitical concerns and expectations of a more hawkish policy response triggered a fresh equity sell off, with the S&P 500 (-1.52%) falling to its lowest level since November. By contrast, the dollar index (+0.51%) reached its highest level since November.
In terms of the latest, the harsh rhetoric continued yesterday, alongside the first public comments from Iran’s new Supreme Leader Khamenei. He said the Strait of Hormuz should remain shut and warned that, if the war persisted, other fronts would be opened. Meanwhile, President Trump posted that preventing Iran from acquiring nuclear weapons was “of far greater interest and importance to me” than oil prices. And in the last couple of hours, Trump has posted that we should “watch what happens” to Iran today. There were also conflicting reports about mines in the Strait of Hormuz, with UK Defence Secretary Healey cautioning that “the Iranians may have started mining in the strait”. However, US Treasury Secretary Bessent claimed “we know that they have not mined the straits” as some tankers are coming through. Meanwhile, US Energy Secretary Wright suggested that the US could start escorting tankers through the strait by the end of March.
With no sign of an imminent resolution, oil prices posted significant gains yesterday. Brent crude (+9.22%) rose to $100.46/bbl, while WTI (+9.72%) climbed to $95.73/bbl. And even though this is still well below Brent’s intraday high of $119.50/bbl right after the weekend, the longer prices hover around $100/bbl, the greater the risk of serious inflationary consequences. That’s been reflected in expectations, as the 1yr Euro inflation swap jumped +19bps yesterday to 2.96%, its highest level since late 2023. Moreover, investors are also pricing a longer period of elevated energy prices, with the 12-month Brent future (+2.67%) rising to $76.15/bbl, with a further move up to $76.68/bbl overnight.
Those oil price gains came even as the US has looked to introduce additional measures in response to the energy shock. For instance, Bloomberg reported that the administration plans to waive the Jones Act, which requires shipping between US ports to be done by American ships. So that could reduce costs for shipping fuel within the US and helped a modest decline in US crack spreads yesterday (the difference between crude oil and wholesale petroleum). Then in the evening, the US Treasury announced an expansion of temporary sanction waivers for purchases of Russian oil.
Beyond commodities, sovereign bonds saw another broad sell off as inflation fears fed into renewed rate hike speculation. The move was especially clear in Europe, where 10yr bund yields (+2.5bps) rose to 2.95%, their highest level since October 2023. France’s 10yr OAT yield (+5.6bps) climbed to 3.62%, its highest since the peak of the Euro crisis in 2011. UK gilts fared even worse, as market pricing for a BoE rate hike this year hit an 82% probability by the close, with the 10yr gilt yield (+8.7bps) closing at a six-month high of 4.77%.
US Treasuries followed a similar pattern, with particularly pronounced increases at the front-end as doubts grew about the Fed’s ability to cut rates this year, even under a new Chair. So there are now just 20bps of cuts priced in by the December meeting, meaning that—for the first time this year—a 2026 rate cut is no longer fully priced. Instead, investors have to look as far out as the June 2027 meeting for the first fully priced cut. That backdrop drove another sell off, with the 2yr Treasury yield (+9.0bps) rising to a six-month high of 3.74%, while the 10yr yield (+3.1bps) moved up to 4.26%.
That combination of higher oil prices and more hawkish central bank pricing weighed further on risk assets, with equities declining on both sides of the Atlantic. The S&P 500 (-1.52%) fell for a third consecutive session, reaching its lowest level since November. Yet even so, the index is still only -4.4% off its record high and -3% below its pre strike level. So despite the volatility, it’s still not halfway to technical correction territory, let alone a bear market. Energy stocks (+0.98%) outperformed, with that segment of the S&P 500 reaching a record high. Meanwhile in Europe, the STOXX 600 (-0.61%) fell for a second day, though it remains above Monday’s levels and is still -5.5% below its prestrike record high, again some distance from correction territory.
That said, the equity performance was increasingly challenging yesterday, with 391 decliners in the S&P 500, the most since January. The Mag-7 (-1.86%) snapped a three-day winning streak, moving to within half a percent of technical correction territory, while the small cap Russell 2000 (-2.12%) closed at a 2026 low. In addition to the oil spike, market sentiment was weighed on by renewed concerns over private credit, the S&P 500 Banks (-2.16%) underperforming the broader index, whilst US IG credit spreads widened +4bps to 90bps, their highest level since May.
Overnight in Asia, that slide has continued for the most part, with sizeable losses for the Nikkei (-1.37%) and the KOSPI (-1.76%). Chinese equities are faring relatively better however, with the CSI 300 (+0.36%) and the Shanghai Comp (+0.02%) posting modest gains. In the meantime, the Japanese yen has weakened further in the last 24 hours, closing at 159.35 per US Dollar yesterday, the weakest since July 2024. Indeed, it’s getting closer to levels where the authorities have previously intervened to support the currency. Looking forward however, equity futures in the US and Europe are a bit more positive this morning as oil prices have been relatively stable in the last 24 hours. So those on the S&P 500 are up +0.17%, and those on the DAX are up +0.13%.
Looking ahead, today’s data releases include UK GDP and Euro Area industrial production for January. In the US, we’ll also see January PCE inflation, the second estimate of Q4 GDP, and preliminary durable goods orders for January. Central bank speakers include the ECB’s Wunsch.
https://cms.zerohedge.com/users/tyler-durden
Fri, 03/13/2026 - 08:34
https://www.zerohedge.com/markets/futures-session-highs-after-oil-drops-below-100-india-hormuz-transit-hopes

Stocks Drop As Oil Rebounds Over $90 On Escalating War, Ignoring Looming SPR Release
Stocks Drop As Oil Rebounds Over $90 On Escalating War, Ignoring Looming SPR Release
US equity futures remain extremely illiquid, jittery and volatile, and are down 10bps near the morning lows, erasing a 0.5% gain after earlier rebounding on hopes the upcoming SPR release will keep oil lower (it has so far failed to do that). Global equities saw a leg lower during APAC hours following an FT report that JPMorgan is marking down private credit portfolios. Mixed messaging from the Trump administration has helped fuel sharp swings in volatility gauges, with the VVIX jumping 10 points on Tuesday. As of 8:10am ET, S&P and Nasdaq futures are down 0.1%, as Oracle’s 10% climb in the pre-market offers support to the AI trade, while inflation is back in focus with today’s CPI print. The ORCL print supports optimism across the secular AI data center trade with focus on raised FY27 rev guidance on management's expectations for continued expansion in AI and advanced compute demand. Asia is leading overseas with TWSE up 410bps, NKY up 143bps, Europe flat to lower led on the downside by Germany down 67bps. In commodities, crude up 300bps feels like a non-event vs. intra day swings over the last seven trading days. Oil does, however, remain in focus as strikes continued across the Middle East overnight, with the UK Navy noting three vessels were hit in the Strait of Hormuz and the Persian Gulf. The IEA is proposing a record release of up to 400 million barrels of emergency oil reserves — more than double the amount deployed after Russia’s invasion of Ukraine. However, as https://www.zerohedge.com/markets/iea-proposes-largest-ever-oil-stockpile-release-there-just-one-big-problem
, it is unlikely the release will do much for a sustained drop in prices. Moves elsewhere in commodities benign. Yields elevated ahead of CPI with 10-year at 4.17%, dollar bid back with DXY at $99 and Bitcoin lower down 1% just below $70k. German CPI in line at +1.9%. We’ll get US CPI at 8:30am ET this morning.
https://cms.zerohedge.com/s3/files/inline-images/ES%202026-03-11_7-53-56.jpg?itok=J1W-8-Lx
In premarket trading, Magnificent Seven stocks are mixed (Alphabet -0.1%, Amazon +0.1%, Meta -0.01%, Nvidia +0.2%, Apple +0.1%, Microsoft +0.1%). Tesla rises 0.2% after Business Insider reported that the company is ramping up an AI agent project
AeroVironment (AVAV) falls 10% after the drone maker cut its revenue guidance for the full year. Analysts trim their price targets, while Citizens noted that some of the weakness stems from defense deals getting delayed.
Campbell’s Co. (CPB) falls 5% after the food company cut its adjusted earnings per share guidance for the full year.
Domo (DOMO) rises 38% after the enterprise software company’s fourth-quarter results beat expectations.
Nike (NKE) gains 2% after Barclays upgraded the sportswear retailer to overweight, citing recent operational progress, financial inflections and management’s disciplined actions.
Oracle (ORCL) rises 9% after the company posted strong results and gave an outlook that suggested there is little letup in demand for AI computing.
Serve Robotics Inc. (SERV) climbs 12% after the developer of AI-powered delivery robots posted fourth quarter results. Also, the company and White Castle launched a delivery pact via Uber Eats.
UniFirst Corp. (UNF) rises 8% after Cintas Corp. agreed to buy the uniform maker in a cash-and-stock deal valued at $5.5 billion
Upstart (UPST) rises 2% as the firm plans to apply for a US national bank charter, aiming to reduce costs and streamline its AI-based lending platform
In other AI news, the Chinese government moved to curb the usage of OpenClaw for banks and state agencies amid a user rush to adopt the AI agent. Amazon is making its debut in the euro bond market with a record eight-part sale, with maturities ranging from two to 38 years, following the 11-part dollar sale on Tuesday to fund AI investments. Elsewhere, Nintendo surged due to the surprise success of its new Pokémon game.
US futures are struggling for direction and Brent climbed back above $90 a barrel as an expected record release of crude stockpiles failed to lift sentiment amid attacks on vessels in the Middle East, simply because it will do little to offset the daily supply taken out by the Strait blockade. Volatility continued to grip equities, with S&P 500 contracts erasing a 0.5% advance, and it's nowhere near over: equities are “set for days of upcoming volatility, as the conflict in the Middle East is far from being resolved,” according to Roland Kaloyan, head of European equity strategy at Societe Generale adding that “Moving forward, there are high chances of seeing alternating risk‑on and risk‑off days.” The “markets’ starting point from when the conflict began was quite high so it’s also some excess optimism being cut to risk premiums which appears closer to what we perceive as the fundamentals.”
Sentiment was also dented as JPMorgan restricted some lending to private credit funds after marking down the value of certain loans in their portfolios, the latest sign of stress in the $1.8 trillion industry.
As the Iranian conflict rages on with no sign of de-escalation, the UK Navy said three ships were attacked in the Strait of Hormuz and the Persian Gulf. Governments are seeking to contain the spike in energy prices, with the International Energy Agency proposing a release of emergency oil reserves of as much as 400 million barrels, according to a person familiar.
“It’s helpful, but it’s more a short-term fix,” said Richard Saldanha, global equity fund manager at Aviva Investors. “The reality is, the way we’re going to avoid any kind of long-term shock is the Strait of Hormuz re-opening again.”
In the latest oil news, the IEA will propose the biggest-ever release of oil reserves. The potential 400 million barrels would cover days of global demand. OPEC’s monthly deep-dive analysis on the global crude market will likely draw more attention than usual.
The US CPI print will be closely watched as stagflation concerns resurface. Bloomberg Chief US Economist Anna Wong expects the reading to be “unseasonally tame,” citing disinflationary effects from several heavily weighted components, while two new supply shocks - in metals and memory chips - were building pre-Iran. Derivatives strategists at Barclays say the S&P 500’s implied move for Wednesday is materially higher than recent history with the forward volatility term structure having shifted higher amid market stress.
The consumer price index report is projected to show a core inflation measure, which strips out volatile food and energy costs, rising 0.2% last month. That would suggest some easing in price pressures before the outbreak of the war. Money markets are leaning toward a Federal Reserve rate cut in July and the possibility of a second move in December.
“Even with geopolitics in the foreground, investors still want CPI to validate the ‘disinflation-with-room-for-cuts’ narrative rather than re‑ignite a sticky‑inflation scare,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg.
Inflation expectations are building in international markets with European assets facing challenges because cost pressures concerns have soared rapidly, and an ECB rate hike is potentially closer than thought, according to Governing Council member Peter Kazimir.
The Stoxx 600 fell 0.4% to 603.44 with 417 members down, 171 up. The upside in energy prices and mounting bets that the ECB will hike rates have knocked European stocks lower with the Stoxx 600 down 0.8%, although off the lows of the day as oil trimmed gains; retail and automotive stocks outperforming, while industrial goods and real estate underperforming.  Here are the biggest movers Wednesday:
Balfour Beatty shares surge as much 13% to a record high after the construction group announced better profits and a larger buyback than expected
Inditex shares gain 5.2%, outperforming European peers, after the Zara parent reported strong results for 2025 and gave a trading update for 1Q that analysts called “reassuring.” Shares are 2.8% lower YTD
Orlen gains as much as 4.2% to the highest since Nov. 2017 after PKO and Santander both raised the Polish energy group to buy, expecting higher refining and gas margins from disruptions in the Middle East
Avolta shares climb as much as 4.6% after the travel retailer reported solid results, announced a buyback and confirmed its 2026 outlook, despite uncertainty caused by conflict in the Middle East
Wacker Chemie shares rise as much as 10% after the German chemicals firm posted better-than-expected guidance for 2026 on the back of its semiconductor polysilicon unit and cost savings
Elis shares rise as much as 7.7%, the biggest jump in 11 months, after the workwear specialist delivered in-line results and outlined a bigger buyback for this year than expected
CVC Capital shares fall as much as 7.4% to a new low as the private equity and investment advisory company cuts guidance for performance-related earnings again
Legal & General shares fall as much as 6.2%, the most in 11 months, as the insurer and asset manager’s solvency ratio, an indication of financial strength, proves lower than expected
Rheinmetall shares fall as much as 6.3% after the German defense company’s sales outlook fell short of analyst expectations. Oddo BHF says the print is slightly disappointing when it comes both to results and 2026 guidance
Canal+ shares drop as much as 21%, the sharpest fall on record, as challenges at newly-acquired MultiChoice Group weigh on sentiment and detract from positive trends in the rest of the business
Galenica shares fall as much as 5.3% after UBS lowers earnings per share expectations for the Swiss pharmacy operator through 2028, citing a weak flu season and the strong franc
BW LPG falls as much as 10%, the most in almost nine months, after DNB Carnegie gives the maritime gas transportation company its only sell rating and sets a new Street-low PT to reflect an uncertain near-term outlook
Earlier, Asian stocks - which are now due for a painful catch down - rose as oil prices cooled, easing concerns about a major inflation shock for the region’s energy-import-dependent economies. The MSCI Asia Pacific Index gained as much as 2%, adding to Tuesday’s 3.2% advance. Shares of chip giants such as TSMC, Samsung and SK Hynix were among the biggest contributors to the rally after better-than-expected earnings from Oracle Corp., which pushed the cloud infrastructure company’s stock up nearly 10% in extended US trading. Oil climbed back near $90 a barrel after the close of trading in several Asian markets, paring the previous session’s 11% plunge, as vessels in the Middle East came under fire amid ongoing military strikes. Volatility across financial markets continued to be high as mixed messages from the Trump administration over the war in Iran kept investors on edge.
In FX, the Bloomberg Dollar Spot index faded losses as the risk tone deteriorated and is now flat. Aussie dollar is the clear outperformer across the majors as traders expect the RBA to deliver another rate hike next week.
In rates, treasury yields nudged higher ahead of the February inflation print; long-end yields are about 2bps higher as oil advance weighs globally. US front-end yields are little changed, slightly extending Tuesday’s curve-steepening move; 10-year near 4.17% is higher by less than 2bps with German and UK counterparts cheaper by 5bp and 7bp. European bonds plunged as a central bank official warned the Iranian war could force an earlier-than-expected interest-rate hike. Front-end bonds in Europe remain under pressure with German and UK two-year yields adding 8bps and 10bps respectively.  Focal points of US session include February CPI report and $39 billion 10-year auction. Corporate new-issue slate may include Salesforce with a jumbo offering following Tuesday’s single-day volume record.
In commodities, brent crude futures are up 3.4% and largely shrugging off news that the IEA has proposed a 300-400 million barrel reserve release.  Spot gold is flat, while silver declines 1.8%. Bitcoin is down 1%.
US economic data slate includes February CPI (8:30am) and federal budget balance (2pm)
Market Snapshot
S&P 500 mini -0.1%,
Nasdaq 100 mini -0.1%,
Russell 2000 mini -0.5%
Stoxx Europe 600 -1%,
DAX -1.6%,
CAC 40 -1%
10-year Treasury yield +1 basis point at 4.17%
VIX +0.8 points at 25.73
Bloomberg Dollar Index little changed at 1200.97,
euro -0.1% at $1.1596
WTI crude +5.2% at $87.79/barrel
Top Overnight News
Iran has begun laying mines in the Strait of Hormuz, the world’s most important energy chokepoint that carries about one-fifth of all crude oil, according to two people familiar with US intelligence reporting on the issue. The mining is not extensive yet, with a few dozen having been laid in recent days. CNN
The IEA is proposing a record release of up to 400 million barrels of emergency oil reserves — more than double the amount deployed after Russia’s invasion of Ukraine, a person familiar said. Japan is set to release oil reserves by itself as early as Monday, NHK reported, citing PM Sanae Takaichi. BBG
The Trump administration believes it can withstand a brief spike in oil prices — for as many as four weeks, as one person close to the White House suggested — before the political hit does lasting damage. Politico
JPMorgan Chase has clamped down on its lending to private credit groups, with bankers looking to cut risks as concerns mount over the credit quality of companies in their stables.
Global bonds face more declines as traders bet inflation fallout from the Iran war will push central banks to raise rates. Markets are pricing two hikes in Australia and see the BOJ and ECB among candidates to also tighten. BBG
Lebanon's Hezbollah is applying lessons from its last war with Israel as it braces for a possible full-scale Israeli invasion and protracted conflict, returning to its roots in guerrilla warfare in south Lebanon, four Lebanese sources said. RTRS
The UK Navy said three vessels were hit in the Strait of Hormuz and the Persian Gulf. BBG
China moved to restrict government agencies and state firms from running OpenClaw AI apps on office computers. BBG
ECB’s Christine Lagarde said policy makers will ensure the Iran war doesn’t cause the same inflation surge as Russia’s Ukraine invasion did. BBG
Senators Warner (D) and Rounds (R) are to introduce new legislation focused on AI and the workforce: Axios
CPI Preview from Goldman: Expect a 0.17% increase in February core CPI (vs. +0.2% consensus), corresponding to a year-over-year rate of 2.42% (vs. +2.5% consensus). Expect a 0.18% increase in headline CPI (vs. +0.3% consensus), reflecting higher food (+0.1%) and energy (+0.5%) prices. GS forecast is consistent with a 0.24% increase in core PCE in February.
A more detailed look at global markets courtesy of Newsquawk
APAC stocks traded higher as the recent easing of oil prices helped the region shrug off the lacklustre lead from Wall Street and reports of Iran beginning to lay mines in the Strait of Hormuz. ASX 200 gained with strength in mining, resources, materials and financials, front-running the advances, but with upside capped amid increased bets for the RBA to hike rates at next week's meeting following recent central bank rhetoric and calls by some of Australia's largest banks for consecutive rate increases in March and May. Nikkei 225 rallied following the recent easing of oil price pressures and as softer-than-expected PPI data, which showed a surprise monthly deflation, supports the case for a delay in BoJ policy normalisation. Hang Seng and Shanghai Comp lagged amid quiet catalysts and with Chinese officials said to be frustrated by what they see as insufficient US preparation for the Trump-Xi summit later this month, while China also moved to curb the use of OpenClaw AI by banks and state agencies.
Top Asian News
Japan's government is considering measures amid Middle East tensions and will announce gas and utility price measures at an appropriate time, according to Nikkei.
European bourses (STOXX 600 -1.0%) are entirely in the red, as the Iran conflict intensifies. Losses in the IBEX 35 (-0.4%) have been limited after positive Inditex (+0.8%) earnings, which beat Q4 EBIT estimates and boosted capex following a strong start to 2026. The DAX 40 (-1.2%) underperforms after Rheinmetall (-6.2%) missed FY net income and guided softer 2026 revenue than analysts expected. European sectors are broadly weaker across the board, as Energy (+0.3%) continues to gain. Real Estate (-1.3%) and Financial Services (-1.3%), alongside Industrial Goods and Services (-1.8%), sit at the bottom of the pile, with higher yields and risk tone weighing on the sectors.
Top European News
European Commission draft Citizens' Energy Package recommends concrete measures to lower household energy prices, Handelsblatt reported; aim is to lower electricity taxes to a minimum.
Central Banks
ECB's de Guindos said risks are tilted to the downside, macroeconomic projections will be much more complicated now.
ECB's Kazaks said the ECB could act if war raises inflation expectations.
ECB's Kazimir said a rate hike on Iran may be closer than thought; no reason to act at next week's meeting.
ECB’s Villeroy said he does not expect a rate hike at next week's ECB meeting, said energy costs are a minor part of consumer spending, said banks should stay calm amid the Iran crisis.
ECB's Nagel said the ECB will act decisively if an energy spike feeds into durably higher inflation; the risk of higher inflation has risen, economic outlook has deteriorated; the latest US statements on Iran war offer cause for hope.
Westpac and National Australia Bank now expect the RBA to hike rates in March and May.
FX
DXY is choppy this morning; currently trading around the unchanged mark, within a narrow 96.69-99.07 range. Little fresh from a European perspective, as focus remains on newsflow out of Iran. As it stands, the current conflict is showing few signs of ending, with reports now suggesting that Iran is taking steps to lay mines in the Strait of Hormuz. On the energy front, the IEA Governing Board is meeting today, whilst a separate G7 discussion on energy coordination is also scheduled for 14:00 GMT today. It was recently reported that the IEA proposed a 300-400mln barrel release of stockpiles – sources suggest that, should there be no objections, it could be announced as soon as today. Focus later will also be on US CPI, though it may lack signalling capacity given the current geopolitical situation.
The Aussie extends on recent outperformance, as more banks now expect the RBA to hike rates at next week’s meeting. NAB and Westpac are the latest banks seen supporting a hike, joining the likes of Goldman Sachs and Bank of America. Delving into Westpac briefly, the bank previously forecast a hike in May, but the analysts now believe that the RBA will be “compelled to react” to the recent strength in oil prices. AUD/USD currently trades towards the upper end of a 0.71154 to 0.7185 range.
Other G10s are trading modestly on either side of the unchanged mark vs the USD. The Loonie posts mild gains, given today’s strength in oil prices, whilst the JPY is the slight laggard, joined by the EUR. USD/JPY is venturing back into the touted “intervention zone”, beyond the 158.00 mark - though desks question the efficacy of intervening as the Iran war continues. GBP is essentially flat, awaiting cues from the Treasury Committee, which will question the Chancellor Reeves on the Spring Statement. BoE’s Breeden is also set to speak.
For the EUR, currently trades just above the 1.1600 mark, within a 1.15904-1.1645 range. Today, there was a slew of ECB speakers, with particular focus on Kazimir who suggested that a rate hike on Iran may be closer than thought. This spurred some very modest upside in the EUR at the time, but was ultimately short-lived, given that he stated there is no reason to move rates at the next meeting.
Fixed Income
APAC trade for fixed income was for the most part rangebound, with USTs and Bunds holding a handful of ticks in the red. JGBs also opened under pressure, with downside of 20 ticks at most. However, the move proved short lived as strong demand at the 5yr JGB tap underpinned the benchmark and lifted it to a 131.98 high, just shy of yesterday's 132.01 best.
While relatively contained at first, EGBs came under renewed pressure early doors following ECB speak and a further uptick in energy benchmarks. Sending Bunds to a 126.55 trough over the course of the morning. On the former, Kazimir said an Iran-related rate hike could be closer than thought, though clarified that there is no reason to act in March. Near term market pricing has seen a very slight hawkish move this morning, but more pertinently end-2026 pricing implies around 25bps of tightening.
In geopols, the UKMTO update seemingly spurred another leg higher in the crude space, with additional impetus potentially coming from the ongoing reporting around but lack of action on a reserve release.
Moving to Gilts, the benchmark opened lower by over 50 ticks and has since slipped another 30 or so to a 90.27 base. Currently lagging, posting downside of 78 ticks vs 63 for Bunds. Action is very much occurring in tandem with the EGB move. Additionally, the UK has a packed agenda with Chancellor Reeves discussing her Spring Statement with the TSC, the release of Mandelson-related files by the government (around 12:30GMT) and then an appearance from BoE's Breeden, however this is scheduled to be on stablecoins.
Vnet (VNET) , China's largest data centre operator, is considering a dollar bond sale to fund expansion, Bloomberg reported citing sources.
Amazon (AMZN) opens books on eight-part EUR denominated bond offering.
Japan sold JPY 1.9tln 5yr JGBs; b/c 3.69x (prev. 3.10x), average yield 1.633% (prev. 1.640%).
Australia sold AUD 1bln 4.25% October 2036 bonds, b/c 3.87, avg. yield 4.9002%.
Commodities
WTI and Brent front-month futures have been grinding higher since early European hours following a choppy APAC session and the declines seen during the prior session. Yesterday, there was a bout of selling pressure after US Energy Secretary Wright mistakenly posted that the US Navy escorted an oil tanker through the Strait of Hormuz, although oil then pared some of the losses as the post was deleted shortly after, and the White House confirmed that this was false.
Note, the IEA Governing Board is meeting today, whilst a separate G7 discussion on energy coordination is also scheduled for 14:00 GMT today. It was recently reported that the IEA proposed a 300-400mln barrel release of stockpiles – sources suggest that, should there be no objections, it could be announced as soon as later today.
Spot gold holds an upward bias on either side of the USD 5,200/oz level, with the precious metal kept afloat alongside the recent easing in oil price pressures, although DXY has clambered off worst levels as eyes remain on flows in the Strait of Hormuz. A deterioration in sentiment in early European hours cushions downside for the yellow metal for now, which resides in a narrow USD 5,175.35-5,223.38/oz at the time of writing.
Copper futures traded rangebound overnight but then slipped in early European hours amid a broader deterioration of sentiment as the Iranian war shows no signs of ending despite recent commentary from US President Trump. 3M LME copper is back under USD 13,000/t and resides towards the bottom end of a USD 12,993.00-13,151.53/t at the time of writing.
G7 statement said the group is vigilantly monitoring the energy market, and G7 supports in principle the use of strategic oil reserve.
IEA to recommend the release of strategic reserves, according to sources; volume in the first month would reportedly exceed 100mln barrels.
IEA reportedly proposed oil stockpile release of around 300-400mln barrels, according to Bloomberg; decision is possible later on Wednesday, said a source.
IEA has proposed the largest ever release of oil from strategic reserves to bring down the price of crude, according to WSJ. "Countries would decide Wednesday whether to release oil stocks in an attempt to tame crude prices". "The release would exceed the 182 million barrels of oil that IEA member countries put onto the market in two releases in 2022 when Russia launched its full-scale invasion of Ukraine".
As part of a potential 400mln barrel IEA crude release, Germany would release around 19.5mln barrels, Handelsblatt reports citing sources; equating to around 20% of Germany's reserves
Black Sea CPC blend oil exports were reportedly revised down to around 1.4-1.5mln BPD for March (prev. 1.7mln BPD)
White House reportedly believes it can "withstand a brief spike in oil prices — for as many as four weeks... before the political hit does lasting damage", according to Politico citing sources.
Iraq's oil ministry has sent a letter to the Kurdistan regional government for the export of at least 100k BPD via the Kurdistan pipeline to Turkey's Ceyhan, according to oil officials.
EU Commission President von der Leyen said Europe's dependency on fossil fuels have cost it EUR 3bln in extra costs in the first 10 days of the Iran war, returning to Russian fossil fuels in the current crisis would be a strategic blunder. EU is preparing options to lower energy prices, which include better use of purchase power agreements and CFDs, state aid measures, gas price subsidies or caps.
Maersk (MAERSKB DC) CEO tells the WSJ that 10 ships are trapped in the Persian Gulf and would need at least 10 days to resume normal operations if a ceasefire was to occur.
Glencore (GLEN LN) workers reportedly set to conduct a strike at Australian copper refinery, according to Bloomberg.
Geopolitics
Iran's Joint Command Spox said US and Israeli banks will be hit after an attack on an Iranian bank, via IRNA.
Iran’s IRGC said it carried out its heaviest and most intense attacks since the start of the war, targeting US and Israeli assets across the region, according to WSJ.
IRGC said it launched missiles carrying 2-ton warheads in a new wave of heavy, multi-warhead strikes targeting US bases in Iraq and Bahrain as well as Israel.
Iran's police chief said anyone taking to the streets at the enemy's request will be confronted as an enemy and not a protester, adds security forces are prepared to respond and have their fingers on the trigger.
Iran launches new wave of missiles on occupied territories.
Iranian armed forces spokesperson vows retaliation for Israeli and US strikes on residential areas.
US officials said Iran has laid less than 10 mines in the Strait of Hormuz and it is unclear if it intends to lay more in the near term, according to WSJ.
Drone reportedly hits a US diplomatic facility in Iraq, according to Washington Post.
US Central Command said US forces eliminated multiple Iranian naval vessels on March 10th, including 16 mine layers near the Strait of Hormuz.
Air defenses shoot down a drone targeting a US military base near Erbil Airport in Iraqi Kurdistan.
Israeli army announces massive wave of raids on Tehran, targeting Iranian regime infrastructure.
UAE Defence Ministry reported air defences are currently intercepting missiles and drones from Iran.
Israel rejects Lebanon's request for a halt in fighting to allow for talks, according to FT.
UKMTO said it has received a report of an incident 50NM north-west of Dubai, with a bulk carrier hit by an unknown projectile.
Russia's Kremlin said Istanbul is an possible location for talks next week but there is no specific clarity yet.
North Korea conducted strategic cruise missile tests on Tuesday for a naval destroyer, while Leader Kim said destroyers must be equipped with supersonic weapons, according to KCNA.
US event calendar
7:00 am: United States Mar 6 MBA Mortgage Applications, prior 11%
8:30 am: United States Feb CPI MoM, est. 0.29%, prior 0.2%
8:30 am: United States Feb Core CPI MoM, est. 0.23%, prior 0.3%
8:30 am: United States Feb CPI YoY, est. 2.4%, prior 2.4%
8:30 am: United States Feb Core CPI YoY, est. 2.5%, prior 2.5%
2:00 pm: United States Feb Federal Budget Balance, est. -310b, prior -94.62b
DB's Jim Reid concludes the overnight wrap
After an extraordinary start to 2026, a small – and possibly brief – pocket of relative calm has returned to markets. I'd stress the emphasis on the word relative. The year has already delivered Venezuela, Greenland, an early year JGB slump, a surge and subsequent slump in gold and silver, IEEPA tariffs being overturned, sharp falls in software and other AI sensitive stocks, private credit fears, major breakthroughs from Claude and Anthropic, and viral, vibe-driven commentary from Matt Shumer and Citrini Research that wiped more than a trillion dollars off global equity markets amid fears of disruption and millions of imminent job losses. We have also seen the KOSPI rise more than 50% in the first handful of weeks of the year, only to fall into a bear market before rebounding. And now we find ourselves in the middle of the Iranian conflict. Have I missed anything? In nearly 31 years of doing this job, I’ve experienced many years dominated by huge headlines and crises, but I don’t think I’ve ever seen the narrative shift so rapidly over such a short period. What is equally impressive is that most asset markets remain healthily positive for the year.
Until we move onto the next big event, markets continue to be driven by volatile news flow around Iran and the outlook for oil flows. Overall, the narrative has shifted towards a cautiously more optimistic tone, even as there’s little sign of an imminent end to the conflict. The improved optimism helped drive a dramatic fall in oil prices, with Brent crude down -11.28% from Monday’s European close to $87.80/bbl, marking its largest one-day decline since March 2022. The 12-month Brent future also fell by -1.93% to $72.05/bbl. After some volatility late yesterday, Brent is slightly lower again this morning and is around -27% below Monday’s intra-day highs but still about +20% above where it was before the US and Israeli strikes against Iran.
While much of the oil decline had come after Trump comments late on Monday, the move extended on Tuesday, notably after Saudi Aramco said it will ramp up crude flows via its pipeline to the Red Sea to 7mb/day within a few days, which would allow it to resume 70% of its usual oil shipments. While redirection of crude via this route was expected, it was still seen as good news as questions remained over its exact capacity. And while reporting over potential mining of the Strait of Hormuz saw oil prices bounce late in the US session, they moved lower again overnight after the Wall Street Journal reported that the IEA (International Energy Agency) has proposed the largest release of oil reserves in history to combat rising prices. IEA member countries are expected to decide on the proposal today, while G7 leaders will also today discuss the response to the crisis, according to Canada’s Mark Carney.
Brent even moved as low as $81/bbl shortly after the European close yesterday as US Energy Secretary Chris Wright posted that the US had successfully escorted an oil tanker through the Strait of Hormuz. However, this post was soon deleted and the White House confirmed that no such operation took place. And not long after, President Trump posted that Iran would face consequences “at a level never seen before” if it placed any mines in the Strait of Hormuz. That came as CNN reported that Iran was beginning to lay mines in the straits. Those headlines saw Brent move back towards $92/bbl, before declining again following the WSJ report on the planned oil reserve release.
Easing oil market stress sparked a strong rally in risk assets yesterday, with the STOXX 600 (+1.88%) recording its best day since last April. And while more concerning headlines late in the US session saw the S&P 500 (-0.21%) erase its gains, futures on the S&P 500 are +0.32% higher overnight. As I started typing this, they were +0.5% higher but an FT story has just been released suggesting JP Morgan have "clamped down on its lending to private credit groups" and have "marked down the value of certain loans in their portfolios". Asian markets are also off their highs but still up strongly with the Nikkei (+1.99%) and Kospi (+2.52%) leading the gains in Asia this morning.
The volatility late in the US session did mean that the S&P 500 (-0.21%) closed nearly a percentage point off intra-day highs, with the equal-weight S&P 500 seeing a larger -0.82% decline. And the VIX index closed at 24.93, a modest -0.57pts lower on the day and notably above its intra-day low of 22.19. Still, while there remains plenty of caution, financial stress has eased materially since the start of the week when the VIX reached 35 at Monday’s open. And despite the recent volatility, the S&P 500 is still less than 3% from its record high on January 27. Some of the risk premium was also stripped out of other assets, with US high yield spreads tightening by -9bps while the dollar index (-0.35%) recorded its largest daily fall in the past month.
The Mag-7 have played a big role in supporting the relative resilience of US equities, with the index now +1.15% above its levels before the strikes after a +0.38% gain yesterday. The tech mood was also helped by Oracle’s results after the US close last night, with a strong sales forecast sending its stock +8% higher in after-hours trading.
Although developments in the Middle East remained the dominant driver, the latest US economic data also reinforced the picture of resilience. ADP’s weekly private payrolls report showed a four-week average of 15.5k for the period up to February 21, equivalent to around 62k on a monthly basis. Meanwhile, US existing home sales surprised to the upside in February, rising to an annualised pace of 4.09mn (vs 3.88mn expected). These releases helped mitigate concerns following the weakness in last Friday’s jobs report and pushed yields higher. A surge in corporate bonds sales added some upward pressure on yields, with a soft 3yr auction and volatile oil headlines leaving 10yr yields (+6.0bps to 4.16%) at the session’s highs by the close. Treasuries are reversing some of this move overnight, with the 10yr yield down -1.6bps.
US data remains firmly in focus today with the release of the February CPI report. This is a key print, as the recent oil shock has pushed back market expectations for the next Fed rate cut. While the Fed is widely expected to hold rates steady at next week’s meeting, today’s data will help shape expectations for subsequent decisions. Our US economists are watching for tariff related strength in core goods, particularly apparel, alongside recent gains in wholesale used car prices. Overall, they expect headline CPI to rise by +0.27%, boosted by a +1.0% increase in energy prices, keeping the year-on-year rate at +2.4%. Core CPI is forecast at +0.24% month on month, leaving the annual rate unchanged at +2.5%. For more detail, see their full preview here.
In Europe, markets rallied sharply as investors finally had the chance to react to Trump’s comments made after the previous day’s close. All major equity indices surged, including the DAX (+2.39%), FTSE 100 (+1.59%) and CAC 40 (+1.79%). Fixed income markets also saw large moves, as the fall in oil prices prompted investors to rapidly scale back expectations for rate hikes this year. Overnight index swaps are now pricing just 17bps of ECB tightening in 2026, down from 30bps at Monday’s close, while BoE pricing for December moved from pricing 1-2bps of hikes to 16bps of cuts by the close. As a result, 10 year gilt yields dropped by -9.3bps, their biggest daily fall since the reaction to the 90 day tariff delay after Liberation Day last year, while 2 year gilt yields fell -12.3bps. Moves in German bunds were more muted, with the 10 year yield down only -2.0bps to 2.83%, although the 2 year yield declined by a larger -6.4bps. Overall, the backdrop now looks much closer to the scenario outlined by our European economists here, which envisages a moderate and transitory shock rather than one that would prompt ECB tightening.
Early morning data showed that Japan’s wholesale inflation (PPI) slowed for a third consecutive month in February (+2.0% y/y) down from +2.3% in January and coming in slightly below the 2.2% forecast. This moderation was largely facilitated by government fuel subsidies, providing a temporary buffer against rising commodity costs. Nevertheless, economists warn that the benefits may be short-lived due to the escalating oil prices.
Looking ahead, today brings the US February CPI and the federal budget balance. Central bank speakers include the Fed’s Bowman and the ECB’s Guindos and Schnabel. Notable earnings include Telecom Italia, and there is also a 10-year US Treasury auction.
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Wed, 03/11/2026 - 08:28
https://www.zerohedge.com/markets/stocks-drop-oil-rebounds-over-90-escalating-war-ignoring-looming-spr-release