원유 및 수익률 상승에 따른 선물 하락, 끊임없는 전쟁 헤드라인 핑퐁

Futures Drop As Oil, Yields Rise On Relentless War Headline Ping-Pong

Futures are lower but well off session lows, as overnight headlines induced another bout of aggressive choppiness: those headlines include strikes on Iranian gas facilities, Saudi and UAE considering entering the war, Iranian lawmaker ruling out US negotiations, and then reports of Iran / Egypt discussions on the region pointing toward mediation.As of 8:00am ET, S&P futures were down 0.2%, but moves are staggered jittery and extremely illiquid, and swung earlier between gains and losses. Nasdaq futures are down 0.1% with Mag7 mostly lower, Energy is higher with the balance of Cyclicals flat to Defensives. Treasuries dipped, with the two-year yield climbing two basis points to 3.88%, giving back most of yesterday’s moves; The dollar gained 0.2% while gold edged 0.3% higher. In commodities, Energy leads and precious metals have caught a bid despite the stronger USD. Oil rebound partially from Monday’s slump, with Brent crude back above $100 a barrel. Today’s macro data focus is on weekly ADP, regional Fed activity indicators, and Flash PMIs which may give us an early look at the impact of the Middle East conflict.

In premarket trading, Mag 7 stocks are mixed (Nvidia +0.2%, Microsoft +0.1%, Apple -0.1%, Meta -0.1%, Tesla -0.2%, Amazon -0.2%, Alphabet -0.3%)

Applied Optoelectronics Inc. (AAOI) gains 2.4% after the electronics component manufacturer said it has received a new volume order from one of its major hyperscale customers for 800G single-mode data center transceivers to help expand its network capacity for AI-driven workloads.
Jefferies Financial Group Inc. (JEF) is up 7.6% after the Financial Times reported that Sumitomo Mitsui Financial Group Inc. is working on plans for a potential takeover of the bank.
JFrog (FROG) is up 3.6% after UBS upgraded the software firm to buy from neutral following recent stock weakness, with the analyst noting that there are no signs of a slowdown.
Netgear (NTGR) gains 11% after the US Federal Communications Commission ordered a ban on the import of new models of foreign-produced consumer wireless routers.
In corporate news, Japan’s SMFG is working on plans for a possible takeover of Jefferies, according to the Financial Times. In Europe, Estée Lauder is in talks to buy Puig Brands in a deal that would create a cosmetics giant. The Korea Economic Daily reported that SK Hynix is said to be seeking to raise $10 billion from a potential listing in the US. And Nintendo is cutting back production of the Switch 2 after demand trailed expectations.

Traders continue to juggle headlines around the US-Israeli war against Iran after Trump signaled a possible end to hostilities on Monday following what he described as productive talks. The positive sentiment from those comments faded after Iran denied substantive discussions, while the Wall Street Journal reported that Saudi Arabia and the UAE have taken steps toward joining US efforts in the war against Tehran. Meanwhile, Iran launched overnight missile and drone attacks on the Israeli cities of Eilat, Dimona and Tel Aviv, as well as US bases in the Middle East. Saudi Arabia said it intercepted a drone in its eastern region, and Kuwait said some power lines were put out of service after an Iranian attack. Sirens sounded in Bahrain. Pakistan is said to be making a push to mediate talks to end the hostilities.

In Iran, the Fars news agency reported US-Israeli attacks that damaged a gas pressure-regulation plant and an administrative building in the central city of Isfahan. There was also a strike on a pipeline supplying gas to the Khorramshahr Combined Cycle Power Plant in southwestern Iran, according to Fars.

“It’s a very tricky situation,” said Arnaud Girod, head of cross-asset strategy at Kepler Cheuvreux. “If there’s a deal in five days then there’s a chance the market can bounce back and investors may be able to look through the crisis but if there’s not, a recession is a possibility. The range of outcomes is very large still, which explains the volatility.”

Renewed tensions risk keeping oil prices elevated, potentially stoking inflation and reinforcing expectations that policymakers may delay easing or even tighten monetary policy. Investors are concerned the war will have lasting effects on economic growth and prices, even if hostilities end soon.

“Yes, markets can rebound if talks succeed but even in that case we’re expecting volatility to remain,” said Claudia Panseri, chief investment officer at UBS Wealth Management, who is “as defensive as possible” in Europe and cutting exposure to cyclical stocks like banks. “Oil reserves must be replenished, supply bottlenecks tackled, so things will not go back to where they were prior to the strikes. That means that there would still be an impact on growth and inflation.”

Markets remain on “hyper alert” for the next development, said Anna Wu, a cross asset strategist at Van Eck Associates Corp. “Most investors are still waiting for some sort of talk to be confirmed between Iran and the US for clarity,” she said.

Private credit headlines are adding to the nervousness in markets. A fund jointly run by Future Standard and KKR was cut to junk by Moody’s Ratings, while Apollo capped redemptions from one of its largest non-traded private credit funds for retail investors, after clients sought to redeem 11.2%. Ares gated investors shortly after too. Michael Dell’s family office see the tumult in private-credit markets turning into a buying opportunity. 

In politics, Markwayne Mullin was confirmed Department of Homeland Security secretary, placing the Oklahoma senator in charge of a Trump administration immigration crackdown that has triggered a 37-day funding shutdown of the cabinet agency. 

For markets, it’s difficult to know what to do. “There are no reliable havens right now; even the dollar, typically the biggest beneficiary of a flight to safety, has made only modest gains compared with the world’s major currencies,” writes Bloomberg Opinion’s Marcus Ashworth. Goldman strategists, meanwhile, recommend allocations to real assets such as TIPS and infrastructure stocks to mitigate stagflation risks.
Hedging is increasingly expensive, raising the question of whether there is even any point in buying protection, with moves playing out within minutes instead of weeks. 

The latest Options Snapshot looks at realized vol-of-vol soaring on Monday and the VIX term structure flip-flopping in and out of inversion, reflective of unstable short-term implied volatility. Some spreads have reached quite extreme levels, including the MSCI Emerging Markets ETF/State Street SPDR S&P 500 ETF ratio. 

US PMI data for March is due this morning, after numbers in France and Germany signaled corporate profits are already being squeezed by the war. Houston’s showpiece energy conference, CERAWeek by S&P Global, kicked off on Monday, bringing together top executives in the sector. “We’ve never been in such a crisis, which has so many repercussions long term,” said Carlyle’s chairman of energy, Marcel van Poecke.

European futures marked lower during APAC hours before staging a recovery with the Eurostoxx 50 contracts now basically unchnaged with energy and health care stocks the biggest gainers, while mining and bankiing shares are the worst-performing sectors. Here are the biggest movers Tuesday: 

Puig shares rise as much as 17%, their largest-ever intraday gain, after Estée Lauder said the companies were discussing a deal that would create a cosmetics giant with about $20 billion in annual sales
Straumann shares rise as much as 5.6%, the biggest gainers in the Stoxx 600 Health Care Index on Tuesday, after a sell-side meeting with CFO Isabelle Wege reassured analysts
INWIT shares rose as much as 5.3% after Il Sole 24 Ore reported Ardian is exploring strategic options for its stake, including a potential joint bid with Brookfield Asset Management to take full control of the Italian tower group
Tecan shares gain as much as 8%, the most since Jan. 9, after a regulatory disclosure showed SEO Management held a 3.4% stake on March 16
SAP shares slip as much as 5.1% after JPMorgan downgraded the software maker to neutral from overweight on a view that margin expansion will decelerate due to a business model transition as the AI cycle unfolds
Exor shares fall as much as 7.7%, hitting the lowest level since September 2022, after the Agnellis’ investment company reported net assets for the full year that missed the average analyst estimate
Exail Technologies shares drop as much as 9.7% after one of the investors in the French company offloaded shares at a discount to Monday’s closing price
Bytes Technology shares slide as much as 16% to their lowest intraday level on record after the information technology company said it expects 2027 full-year operating profit to be broadly flat
Skan drops as much as 16% after reporting its full-year results, with UBS saying the health care supplier’s 2026 targets are below expectations
YouGov falls as much as 17% as the research company’s first-half adjusted Ebit misses expectations, with JPMorgan saying this is attributable to sizable investments in both Shopper and AI-enabled products
Earlier in the session, Asian stocks rose, recovering some losses of the previous session, as US comments about discussions with Iran sparked fresh optimism, although market watchers cautioned against over-exuberance. The MSCI Asia Pacific Index rose as much as 2.2%, halting a three-day rout. Advances in Hong Kong, Japanese, Indian and South Korean equity markets led gains in the region, while Malaysia fell. The technology sector, which is closely tied to risk sentiment in the region, rose to support the broader Asian index higher. Indonesia remains shut. Meantime in Japan, a key inflation gauge slowed more than expected to its weakest pace in nearly four years. Japan consumer prices excluding fresh food climbed 1.6% from a year earlier in February, the smallest gain since March 2022.

“It is quite likely that this week we see a relief rally given the market was oversold, but this might be a final solution. The situation is still very fluid,” said Suresh Tantia, head CIO of Asia equity strategy at UBS Global Wealth Management, in a Bloomberg TV interview.

In FX, the Bloomberg Dollar index is higher by 0.2%. The euro and pound saw little follow-through from flash PMI metrics which saw misses on composite readings for the UK and Eurozone - manufacturing prints beat, services missed.

In rates, treasuries hold small losses as US trading begins, with futures just off session lows. US yields are higher by 3bp to 4bp across the curve, keeping curve spreads within a basis point of Monday’s close; 20-year sector underperforms, widening 10s20s30s fly by almost 2bp on the day. US 10-year near 4.37% is cheaper by 2.5bp with UK and German counterparts richer by less than 1bp; UK 2- and 5-year yields outperform, trading richer by 1bp-2bp. European bonds outperform led by gilts after UK March Services PMI missed estimate. This week’s Treasury auction cycle begins at 1pm in New York with $69 billion 2-year note sale; $70 billion 5-year and $44 billion 7-year follow on Wednesday and Thursday. WI 2-year yield near 3.892% is ~44bp cheaper than last month’s, which tailed by 0.1bp

In commodities, brent crude has pulled back a touch in recent trading but remains higher by 0.6% and holding above the $100/bbl level. Prices had been underpinned by an Iranian lawmaker reportedly ruling out negotiations with US President Trump and a Wall Street Journal report that Saudi Arabia and UAE have taken steps toward joining the war. Spot gold is attempting to recover recent losses, up 0.5% versus a 1.5% gain for silver. Bitcoin is up 0.4%. 

Today's US economic data scheduled includes weekly ADP employment change (8:15am), March Philadelphia Fed non-manufacturing activity, 4Q unit labor costs (8:30am), S&P Global US March manufacturing and services PMIs (9:45am) and Richmond Fed manufacturing index (10am). Fed speaker slate includes Barr speaking on the economic outlook at 6:30pm. Core & Main and Dollarama are among companies due to report results before the market open. Dollarama’s Canadian total sales for fiscal 4Q could rise 7%, BI’s scenario analysis suggests, as value-seeking behavior continues to drive traffic. Earnings from GameStop and KB Home follow later. 

Market Snapshot

S&P 500 mini -0.3%
Nasdaq 100 mini -0.3%
Russell 2000 mini -0.4%
Stoxx Europe 600 -0.5%
DAX -1%
CAC 40 -0.6%
10-year Treasury yield +3 basis points at 4.37%
VIX +1 points at 27.1
Bloomberg Dollar Index +0.3% at 1209.28
euro -0.3% at $1.1582
WTI crude +3.4% at $91.09/barrel
Top Overnight News

Iran publicly denied that any direct negotiations were occurring, and US officials said the contacts were at a “very early stage and not substantive.” NYT
Fighting between Iran and the US-Israeli alliance continued with Iran launching overnight missile and drone attacks on Israeli cities and US bases in the Middle East. Trump claimed talks are under way to end the conflict, but Iranian officials denied his claims of behind-the-scenes diplomacy, causing confusion over the participants in the talks and the parameters of a potential deal. BBG
Oil rebounded as Iran launched overnight attacks on several targets, including in Bahrain and Kuwait, while Israel said its Iran strikes are continuing at full intensity. Kuwait said some power lines were put out of service after Iranian attacks. Saudi Arabia and the UAE have taken steps toward joining the war. BBG, WSJ
The Trump administration is quietly weighing Iran’s parliament speaker as a potential partner — and even a future leader — as the president signals a shift from military pressure toward a negotiated endgame. Mohammad ⁠Bagher Ghalibaf is seen by at least some in the White House as a workable partner. Politico
Oil companies and the world’s largest energy consumers face a significant challenge to rebuild global petroleum supply chains and inventories once the critical Strait of Hormuz bottleneck opens, Chevron CEO Mike Wirth said Monday. Wirth cautioned that Iran’s attacks on oil tankers and the broader damage of the Middle East war did greater damage to oil and gas markets than the Russia-Ukraine war. Politico
Chinese banks are experiencing system failures due to surging volumes in gold investment products as investors buy on dips, according to China Securities Journal. BBG
Japan’s core inflation rose 1.6% from a year earlier in February, below the BOJ’s target for the first time since 2022. BBG
The ECB must be “very agile and vigilant” to keep prices in check as the Iran war brings stagflation risks closer, said incoming ECB vice president Boris Vujcic. BBG
A fund run by Future Standard and KKR was cut to junk by Moody’s, a rare occurrence in the $1.8 trillion market. Apollo capped withdrawals from one of its largest non-traded funds for retail investors. BBG
US GOP senators see a path to ending the Department of Homeland Security shutdown after a Trump meeting on Monday: POLITICO.
Four Senate Republicans meeting with US President Trump at the White House and discuss funding for the Department of Homeland Security: POLITICO.
A more detailed look at global markets courtesy of Newsquawk

APAC stocks took their cues from the positive performance on Wall Street, where the major indices rallied, and oil dropped after US President Trump announced US-Iran conversations and a five-day halt of strikes against Iranian energy infrastructure, while Iran denied the talks and called it fake news. Nonetheless, stocks gained in Asia but are well off their earlier highs as the conflict persisted overnight, while oil prices also partially rebounded amid news that gas-related facilities were hit in strikes on Isfahan in central Iran, where offices belonging to a gas company and a gas pressure reduction station were damaged. ASX 200 climbed at the open with outperformance in mining, materials and resources, although the index eventually pared the majority of gains with losses seen in tech and financials, while flash PMI data weakened. Nikkei 225 traded higher but had given back a chunk of the earlier spoils and briefly returned to beneath the 52,000 level with headwinds seen as oil prices partially rebounded from yesterday's slump. Hang Seng and Shanghai Comp gained with outperformance in Hong Kong amid tech strength and with attention on earnings.

Top Asian News

Japanese Inflation Rate YoY (Feb) Y/Y 1.30% vs. Exp. 1.50% (Prev. 1.50%).
Japanese Core Inflation Rate YoY (Feb) Y/Y 1.60% vs. Exp. 1.70% (Prev. 2.00%, Low. 1.50%, High. 1.80%).
Japanese Inflation Rate MoM (Feb) M/M -0.2% (Prev. -0.1%).
Japanese Inflation Rate Ex-Food and Energy YoY (Feb) Y/Y 2.50% vs. Exp. 2.70% (Prev. 2.60%).
Japanese S&P Global Services PMI Flash (Mar) 52.8 vs. Exp. 51.8 (Prev. 53.8).
Japanese S&P Global Manufacturing PMI Flash (Mar) 51.4 vs. Exp. 52.8 (Prev. 53).
Japanese S&P Global Composite PMI Flash (Mar) 52.50 vs. Exp. 51.3 (Prev. 53.90).
Australian S&P Global Services PMI Flash (Mar) 46.6 (Prev. 52.8).
Australian S&P Global Composite PMI Flash (Mar) 47.0 (Prev. 52.4).
Australian S&P Global Manufacturing PMI Flash (Mar) 50.1 (Prev. 51.0).
European bourses (STOXX 600 U/C) trade mixed, with the AEX outperforming its peers while the FTSE MIB lags. The market reaction to the Flash PMIs were muted. However, the commentary within the PMIs gave the first glimpse at the effects of the Iranian war on businesses sentiment and the economy. The EZ release suggested the "eurozone GDP growth slowing to a quarterly rate of just below 0.1% in March with the forward-looking indicators pointing to a heightened risk of a downturn the coming months". European sectors show a positive bias. Energy tops the sector pile, closely followed by Chemicals following broker upgrades for BASF and Brenntag. At the bottom of the pile lies Banks and Basic Resources. In the Luxury space, Puig (+14%) soars after Estee Lauder confirmed it is in talks with the Spanish company, regarding a potential merger.

Top European News

UK S&P Global Composite PMI Flash (Mar) 51.0 vs. Exp. 52.8 (Prev. 53.7, Low. 51.3, High. 53.6). “The war in the Middle East has hit the UK economy in March, stalling growth while driving inflation sharply higher.". “Inflationary pressures have surged higher on the back of rising energy prices and fractured supply chains. The acceleration in cost growth in the manufacturing sector was especially severe, being the sharpest since the depreciation of sterling following Black Wednesday in 1992."
UK S&P Global Manufacturing PMI Flash (Mar) 51.4 vs. Exp. 50.5 (Prev. 51.7, Low. 48.0, High. 51.6).
UK S&P Global Services PMI Flash (Mar) 51.2 vs. Exp. 53 (Prev. 53.9, Low. 50.0, High. 53.8).
EU S&P Global Composite PMI Flash (Mar) 50.5 vs. Exp. 51 (Prev. 51.9, Low. 49.7, High. 51.5). “The survey data are indicative of eurozone GDP growth slowing to a quarterly rate of just below 0.1% in March with the forward-looking indicators pointing to a heightened risk of a downturn the coming months. The survey’s price gauge is meanwhile indicative of consumer price inflation accelerating close to 3%, with cost pressure likely to add still further to selling price inflation in the coming months."
EU S&P Global Manufacturing PMI Flash (Mar) 51.4 vs. Exp. 49.4 (Prev. 50.8, Low. 48.2, High. 50.3).
EU S&P Global Services PMI Flash (Mar) 50.1 vs. Exp. 51 (Prev. 51.9, Low. 50.2, High. 51.9).
German S&P Composite PMI Flash (Mar) 51.9 vs. Exp. 51.8 (Prev. 53.2, Low. 50.7, High. 52.7). "The service sector has seen an immediate negative impact. Growth in business activity has slowed sharply to its weakest since the current upturn began last September, weighed down by a drop in inflows of new work that reflects a combination of increased uncertainty and rising price pressures.". "The big surprise is perhaps the acceleration in growth in the manufacturing sector. Reports from goods producers indicate that demand has in some cases been boosted by companies reacting to the disruption and uncertainty brought on by the war in the Middle East."
Trade/Tariffs

EU farmers see the concessions offered as part of the EU-Australia trade deal as 'unacceptable', AFP reported.
EU and Australia agreed to a free trade deal, according to a joint statement.
Chinese Commerce Minister Wang Wentao meets the US-China Business Council delegation; details light.
FX

DXY is firmer this morning and currently holds at the upper end of a 99.09-99.39 range. Action which appears to be a slight bounce back from the pressure seen in the prior session after US President Trump announced a five-day postponement to military strikes on Iranian power plants. Since, Iran has reportedly denied the notion that talks took place, whilst Israeli press suggested that Iranian Foreign Araghchi informed US envoy Witkoff that Mojtaba Khamenei agreed to negotiations. Markets will await more clarity on the matter in the near term, which may cap the index below recent highs (100.54). Geopols aside, focus later on will be on the weekly ADP jobs stats (last week, the series reported an average of +9k/week over the four-week window) and also Flash PMIs.
G10s are entirely losing against the USD, with clear underperformance in the Antipodeans, which have been impacted by regional factors. For AUD/USD, the pair currently trades around 0.6955, but is still far from Monday’s trough of 0.6910; pressure which stems from weak flash PMIs. As for the Kiwi, RBNZ Governor Bremen highlighted that they would see higher inflation in the near term, which may have impacts on growth.
Over in Europe, a number of PMI metrics have been released. In brief, Manufacturing appears to be remaining resilient whilst the Services component has deteriorated. However, markets looked to the figures for any early indications of the impact on the economy following the Iran conflict. Within the accompanying German report, analysts highlighted that “the service sector has seen an immediate negative impact”, whilst describing manufacturing resilience as a “surprise” – but potentially on “forward purchases over concerns about potential supply disruption in the coming months”. EUR/USD was ultimately little moved on these metrics, and currently trades within a 1.1575-1.1618 range, and around its 21 DMA at 1.1617.
JPY is also a touch lower vs USD, with USD/JPY currently trading within a 158.27-158.79 range. Overnight, Japanese inflation was softer than expected, with headline Y/Y printing at 1.3% (exp. 1.5%). ING opines that the soft print will prove temporary and will not alter the BoJ’s rate hike cycle.
Finally, the UK’s PMI metrics also indicated resilience in Manufacturing, whilst Services were weaker than expected. The accompanying release highlighted that “the war in the Middle East has hit the UK economy in March, stalling growth while driving inflation sharply higher”. Cable saw some fleeting pressure on the report itself, but this was ultimately short-lived; currently trading around its 200 DMA at 1.3434.
Central Banks

BoJ Governor Ueda said he expects underlying inflation to accelerate moderately and price trend is to rise gradually. Tight labour market, firms' active wage, price-setting behaviour will keep in place a cycle in which wages and prices rise in tandem. Temporary freeze on food sales tax may briefly push down inflation, but is likely to have a limited impact on inflation expectations. Will guide monetary policy appropriately to stably achieve the inflation target, accompanied by wage gains. To conduct policy for stable prices with wage growth.
ECB's Kazaks says it is clear prices will be higher, and growth will be slower.
ECB's Vujcic said ECB must be vigilant facing stagflation risk and officials will know soon whether they must act, adds if hikes are needed, better to start with a small move.
RBNZ Governor Bremen said will see higher inflation over the near term and some growth impacts, adds will be looking if firms are passing on costs or absorbing them, also looking for second round effects and will act if inflation expectations shift.
Fixed Income

A bearish start to the day has given way to a slightly mixed session as the morning progresses and broader market benchmarks move.
USTs in the red, lower by just under 10 ticks as it stands, but a few ticks off worst levels. Specifics for the space have been a little light in the early hours, with the market focused primarily on geopolitics and reporting around the Iranian Supreme Leader; see Commodities for a full breakdown.
As it stands, USTs in 110-16 to 110-29 confines, awaiting Flash PMIs for timely insight into how the Middle East situation is impacting the US economy; a point that may be of note as domestic focus turns increasingly to the midterms. Elsewhere, the docket features 2yr supply.
Bunds are now nearly unchanged. Started the day lower by 21 ticks, hitting a 125.24 trough as yesterday's move retraced. Thereafter, the benchmarks lifted in the mid-morning alongside a modest bounce in peers. More recently, a bout of fresh pressure has been seen on Flash PMIs that point to a stagflation environment for the bloc, and one where price pressures are already evident.
Gilts started on the front foot, got to an 88.17 high early doors, as while the benchmark hadn't fully acknowledged the bearishness in fixed seen late-US/early-APAC, the narrative had by the open reverted back to one of modest fixed upside as the energy space came under pressure once again. More recently, Flash PMIs for the UK also point to stagflation, as inflationary pressure "surged" while growth has "stalled". A dynamic that underscores the difficult balancing act the BoE has at the moment, given a desire to avoid a return to price upside, but the already precarious labour and growth narrative factor against tightening.
Commodities

WTI and Brent futures are trimming some of the prior day's heavy losses that were triggered by US President Trump's announcement to postpone military strikes against Iranian power plants and energy infrastructure after the US and Iran had 'very good and productive conversations'. Nonetheless as it stands, Iran denied talks with the US and called it fake news, but said messages had been conveyed in recent days through several friendly countries, while the partial rebound in oil was also spurred by a report that some gas-related facilities were hit amid US-Israeli strikes on Isfahan. Price action this morning has been rather rangebound, although some downside was seen following reports that Iranian Foreign Minister Araghchi is said to have secretly informed US Envoy Witkoff of Iranian Supreme Leader Mojtaba Khamenei’s agreement to negotiate, Al Arabiya reported citing Israeli press Yedioth Ahronoth citing sources, although this remains unconfirmed. Prices clambered off those lows as Israeli official suggests that it is unlikely that Iran will agree to US demands. WTI resides in a current USD 88.50-92.29/bbl range, and Brent in a USD 101.93-101.93/bbl parameter.
Spot gold is subdued amid a firmer USD as traders continue to weigh conflicting reports, with the yellow metal at the whim of the USD and oil prices, trading off lows in a current USD 4,305.94-4,448.33/oz range, but well within yesterday’s USD 4,099-4,536/oz range.
Base metals are mixed with a softer bias. 3M LME copper futures hover on either side of USD 12k/t as concerns over the Iran war’s impact on global growth and inflation weighed on sentiment, with PMIs also pointing to stagflation. 3M LME copper resides in a USD 11,908.00-12,111.98/t range at the time of writing.
Russia's agriculture ministry said the fertiliser export restrictions only concern ammonium nitrate. This comes following TASS reporting that Russia is introducing some limits on fertiliser exports until April 21st.
India's Reliance (RIL IS) has reportedly purchased 5mln bbls of Iranian oil following the US sanctions waiver.
The attacks on the gas pipeline in Khorramshahr did not affect its operations, Iran's Fars News agency reported.
Mitsui O.S.K. Lines (9104 JT) denies reported its vessel passed through Strait of Hormuz.
Japanese PM Takaichi said will start releasing joint oil storage with oil producing countries by end of March.
Macquarie forecasts Brent hitting a floor of USD 85-90/bbl if the Iranian tensions decrease; said USD 150/bbl is still an option if the Strait of Hormuz remains shut until April.
Geopolitics

Iranian Foreign Minister Araghchi is said to have secretly informed US Envoy Witkoff of Iranian Supreme Leader Mojtaba Khamenei’s agreement to negotiate, Al Arabiya reported citing Israeli press Yedioth Ahronoth citing sources.
Senior Iranian Foreign Ministry official said Iran received points from the US through mediators and that they are being reviewed, according to CBS News.
Iranian Revolutionary Guard said it is launching the 78th wave of Operations Al-Waad Al-Sadiq 4 towards the occupied territories and American bases.
The chances of an agreement between the US and Iran are “very small,” Israeli officials told The Jerusalem Post; sources said the deployment of American forces in the Middle East is continuing as usual. Israeli officials also said there has been no change in coordination with the US military or in operational plans.
Israeli official suggests that it is unlikely that Iran will agree to US demands; said US President Trump is determined to reach a deal with Iran.
Israel's Air Force is launching raids on military infrastructure and production sites near Isfahan,, Israel's Channel 12 reports.
Israeli Defence Minister Katz says Israel will establish a buffer zone in southern Lebanon, modelled on what was implemented in Rafah, Al Jazeera reports; the army is now carrying out ground operations in Lebanese territory to control the front line.
Gas-related facilities said to be hit in strikes on Isfahan in central Iran, in which offices belonging to a gas company and a gas pressure reduction station were damaged in a US-Israeli attack on Isfahan in central Iran, according to Fars News Agency.
A projectile fell on a gas pipeline feeding a power station in Khorramshahr, Iran, while there were no casualties.
Saudi Arabia reportedly told the US it was ready to strike Iran if its own power and water facilities were targeted by Iran, according to reported citing sources.
US President Trump's admin is eyeing Iran’s parliament speaker Ghalibaf as US-backed leader, according to POLITICO.
The US is ready to provide real security guarantees if Ukraine withdraws from Donbas, according to Ukrainian press citing sources. According to the interlocutors, in the absence of progress, the American side is allegedly considering the possibility of withdrawing from the negotiations and switching attention to other areas, in particular Iran.
US Event Calendar

9:45 am: United States Mar P S&P Global US Manufacturing PMI, est. 51.45, prior 51.6
9:45 am: United States Mar P S&P Global US Services PMI, est. 52, prior 51.7
9:45 am: United States Mar P S&P Global US Composite PMI, est. 51.9, prior 51.9
10:00 am: United States Mar Richmond Fed Manufact. Index, est. -8, prior -10
6:30 pm: United States Fed’s Michael Barr Speaks on Economic Outlook
DB's Jim Reid concludes the overnight wrap

If Friday does mark the worst point for markets in this conflict (and it's a big if), you'd have to say bravo to the geopolitical playbook often cited by us but borrowed from Binky Chadha and Parag Thatte in our equity strategy team. The average US equity market bottom after a geopolitical shock is 15 days as you can see from last week's CoTD here. Friday was trading day 15 and a horrible close.

We had a horrible open yesterday as well but markets ultimately saw a massive turnaround, with a huge multi-asset rally after Trump said that the US and Iran were talking, alongside a 5-day suspension of US strikes against Iran’s power plants and energy infrastructure that he had threatened on Saturday. For markets, the fact that the two sides might be talking was taken as a huge positive, because it opened up the tail outcome of a much quicker end to the conflict than previously supposed. So by the close, Brent crude oil prices (-10.92%) were back down to $99.94/bbl, which significantly eased fears about the scale of any inflation shock. And in turn, other markets surged back, with the S&P 500 up +1.15% by the close, even though futures were down -1.15% in the European morning, whilst bond yields fell sharply on both sides of the Atlantic. Perhaps bond yields played a part in the strategic calculations with 10yr US yields up +50bps from just before the strikes 3 weeks ago in the London morning yesterday. Stand by today for the European and US flash PMIs for the first signs of the data impact from the war.

Obviously much now depends on the progress of any talks, and whether the more optimistic rhetoric is followed up by concrete action. Indeed, Iranian officials have repeatedly denied that talks with the US were even happening, which had contributed to markets reversing some of the initial risk-on reaction late yesterday and overnight. Brent crude has edged back up nearly 4 percent to $103.88/bbl this morning, with futures on the S&P 500 (-0.69%) and STOXX 50 (-0.84%) notably lower. 10yr USTs are +3.8bps at 4.38%. So some nervousness has crept back in. The WSJ last night reported that Saudi Arabia and the UAE were considering joining the war against Iran which hasn't helped sentiment.

Before this, the catalyst for yesterday’s big moves was a post from Trump on his Truth Social platform, where he said the US and Iran had held “very good and productive conversations regarding a complete and total resolution of our hostilities”. Moreover, he added the US would “postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period”. Later on, Trump added that the most recent discussions happened the previous evening, with Steve Witkoff and Jared Kushner on the US side. Admittedly, there was a bit of a pullback to the news shortly after, as Iran’s state-run Mizan news said there were no talks between Iran and the US, and that Trump’s statements were “part of efforts to reduce energy prices and buy time for the implementation of his military plans”. Nevertheless, even that statement said there were “initiatives from regional countries to reduce tensions”. And later on, an Axios reporter tweeted that an Israeli official had told him that Witkoff and Kushner were negotiating with the speaker of Iran’s parliament.

The trajectory of this newsflow was taken positively, with the prospect of talks leading to a huge slump in oil prices. So Brent crude fell from $113/bbl right before Trump’s post to close at $99.94/bbl. It was a similar story for WTI as well, which fell from around $99/bbl immediately beforehand to just $88.13/bbl by the close. And as optimism mounted about a potential deal, those declines were echoed further out the energy futures curve. So the 6-month Brent future was down from $92/bbl before the post to $83.22/bbl by the close. It's back up to $86.39/bbl as I type this morning.

We're still comfortably below the highs from yesterday morning and that pullback in oil prices was treated with a huge sigh of relief, as it significantly eased fears about a stagflationary shock, and also pushed back against the prospect of imminent rate hikes. That was a big theme yesterday, and during the European morning, investors had moved to fully price an ECB hike as soon as the next meeting in April, which helped trigger a fresh bout of records for sovereign bond yields. In fact at the intraday high, the 10yr bund yield got as high as 3.07%, a level last seen back in 2011 during the Euro crisis.

However, it was a completely different story by the close, with investors ultimately pricing in a less hawkish path for the ECB relative to Friday. For instance, the chance of an April hike was down to 68%, having been at 80% on Friday. And looking further out, 63bps of hikes were priced by the December meeting, down from 77bps on Friday. So that eased the pressure across European sovereigns, with yields on 10yr bunds (-3.9bps), OATs (-4.6bps) and gilts (-7.4bps) all seeing sharp declines. 10yr Bunds traded as low as 2.95% before closing at 3.00%. The yield declines were particularly clear at the front-end of the curve, with the 2yr German (-9.9bps) and 2yr UK (-15.1bps) yields posting their biggest daily drop since the Liberation Day turmoil last April. They'll give up some of these gains at the open this morning though.  

For US Treasuries it was much the same pattern, as market pricing for the Fed oscillated dramatically through the session. At the most hawkish point shortly before Trump’s post, futures were pricing in a 90% chance of a hike by December. But that completely turned around afterwards, with futures basically pricing in a flat path for the year ahead. So that also led to a big turnaround for US Treasuries, with the 10yr yield (-3.7bps) eventually closing at 4.34%, despite being at an 8-month high of 4.44% earlier in the day. As mentioned at the top, US yields have reversed some of those gains this morning.  

The turnaround was evident for equity markets too, as an initial slump gave way to a strong recovery. Indeed at the open, the STOXX 600 was into technical correction territory on an intraday basis, with the index down -11.8% from its record high before the strikes began. But that then completely turned around, with the index rising to as much as +2.30% intra-day, though it pared those gains to +0.61% by the close. And it was much the same story in the US, with S&P 500 futures down -1.15% in the European morning, before the index closed +1.15% higher and having traded as high as +2.23%. Moreover, the VIX had risen above the 30 mark once again, before also coming down to close at 26.15pts.

The partial reversal of the initial market relief came amid doubts over prospects for a negotiated resolution. Iran denied the premise of that Axios report, with the speaker of Iran’s Parliament saying that fake news was being used “to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped”. Meanwhile, Iranian state TV said that the US had tried to negotiate with Iran via intermediaries, but that Iran hadn’t responded to the request. And then overnight, Iran’s Deputy Speaker of Parliament said there would be no negotiations, and that Iran will not “return the Strait of Hormuz to its previous state”.

In Asia markets are off their highs as nervousness around a deal increases. Remember they closed yesterday with sentiment near its lows so markets are still higher. The KOSPI (+2.53%), Hang Seng (+1.48%), Shanghai Composite, and Nikkei (+0.64%) are all higher.  
In terms of data, Japanese core CPI inflation decreased to a near four-year low of +1.6% (v/s +1.7% expected), attributed to ongoing government initiatives aimed at alleviating elevated food and utility costs. It was also lower than the 2.0% figure recorded last month. The headline CPI inflation increased by 1.3% y/y, marking its slowest growth since March 2022. The core-core CPI, which excludes fresh food and energy prices, rose by +2.5% y/y in February, a slight deceleration from the +2.6% increase last month. The preliminary Japanese S&P Global flash composite PMI dropped to 52.5 in March from 53.9 in February, indicating the slowest rate of expansion in three months. This deceleration was widespread across various sectors. Services activity decreased to 52.8 from 53.8, while manufacturing exhibited a more significant decline in momentum, with the headline PMI falling to 51.4 from 53.0. Around all the news flow over the last 24 hours, 10yr JGBs are -3.2bps lower trading at 2.27%.

Elsewhere, the S&P Global Australia manufacturing PMI fell to 50.1 in March 2026 from 51.0 in February. The services PMI dropped from 52.8 to 46.6, signalling the first contraction in over two years. This is the first signs of the impact of the war on the global data. We’ll get the rest of the numbers from Europe and the US today, which are important because they’re one of the first indicators we’ll have covering the period since the strikes began on February 28.

Looking at the day ahead, data releases include the March flash PMIs from the US and Europe, whilst there’s also the Richmond Fed’s manufacturing index for March. Central bank speakers include the Fed’s Barr, and the ECB’s Kocher, Sleijpen, Cipollone and Lane, and the BoE’s Pill. Finally, there’s a general election taking place in Denmark.

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Tyler Durden
Tue, 03/24/2026 - 08:35