- Nasdaq stays under pressure amid lower growth and higher inflation fears on US-Iran war
- Inflation fears reemerge as markets digest higher energy prices from US-Iran conflict
- Will Iran really manage to fully block the Strait of Hormuz?
- EURUSD falls back to January lows despite ECB rate hike bets as US Dollar surges
- Eurozone February preliminary CPI +1.9% vs +1.7% y/y expected
- Italy February preliminary CPI +1.6% vs +1.1% y/y expected
- Oil prices surge higher, looks to eclipse the opening gap up from yesterday
- Dollar continues to go from strength to strength to start the week
- ECB's Villeroy: It would be a mistake to predict rate move in a hurry
- USDJPY on track to revisit the "intervention" level as Japanese yen lacks bullish drivers
- Another rough day beckons for major indices in Europe
- What are the main events for today?
- Silver slammed back down as bids from US-Iran conflict fade
- BOJ might have to put off March rate hike amid US-Iran conflict - report
- FX option expiries for 3 March 10am New York cut
- US, China officials reportedly set to meet to lay the groundwork ahead of Trump-Xi summit
- ECB chief economist Lane warns of inflation spike from US-Iran conflict
- US Central Command confirms strikes on Iranian missile and drone launch sites
- SNB might have stepped in yesterday to limit Swiss franc advance - Credit Agricole
It's the fourth day of the US-Iran war and the markets remain in risk-off mood amid surging energy prices. Inflation fears are running hot and that is sending bond yields higher with traders paring back rate cut bets across the board.
Traders are now seeing just a 50% chance of a second Fed rate cut by year-end and are not expecting a BoE cut at the upcoming meeting anymore. Moreover, the market is pricing a 50% chance of an ECB rate hike by year-end with a 20% chance of an adjustment already in June.
This follows the higher than expected Eurozone Flash CPI today where core inflation increased to 2.4% vs 2.2% expected and 2.2% prior. ECB policymakers are cautioning against overreacting on interest rates as they try to assess the impact and especially the length of the war in the Middle East. Everyone's hoping for it to end quickly, but this is already longer than what we've got used to in the past few years.
Global stock markets are selling off, bond yields are surging, oil prices are increasing and even precious metals have been losing ground. The US dollar is the MVP (most valuable player) here as it extended the gains further today.
In the American session, we don't have anything on the agenda other than a couple of Fed speakers. The economic data has faded into the background though as the market focus remains on the US-Iran war. Traders continue to keep a close eye on the news as clear de-escalatory signals like the US or Israel announcing the end of their operation will trigger a strong relief rally.
The longer this situation drags on, the worse the economic consequences will be...
