On Thursday, US stock indices showed an impressive intraday reversal, recovering most of the earlier decline. By the end of the day, the Dow Jones Index (US30) fell by 0.44%. The S&P 500 Index (US500) decreased by 0.27%. The Technology Index NASDAQ (US100) closed down by 0.28%. Optimism was fueled by Benjamin Netanyahu’s statement about joint efforts with the United States to unblock the Strait of Hormuz, which immediately cooled oil prices to 94 dollars per barrel. Diplomatic initiatives by the Trump administration and Treasury Secretary Scott Bessent aimed at restoring supply chains eased fears of stagflation, bringing buyers back to the bond and stock markets.

European markets were swept by a wave of sell-offs. Germany’s DAX (DE40) fell by 2.82%, France’s CAC 40 (FR40) closed down by 2.03%, Spain’s IBEX 35 (ES35) declined by 2.29%, and the UK’s FTSE 100 (UK100) decreased by 2.35%. The catalyst for panic was reports of Iranian strikes on energy facilities in Qatar and Saudi Arabia, which triggered a vertical surge in gas and electricity prices. US retaliatory threats against Iranian gas fields only added fuel to the fire, forcing investors to price in a scenario of a full-scale energy paralysis in Europe. The geopolitical shock radically changed expectations for central banks: the ECB, the Bank of England, and the SNB not only kept rates unchanged but sharply raised their inflation predictions. A month ago, the market hoped for policy easing, but now traders are pricing in two rate hikes by the end of the year. This “hawkish” shift amid stagflation risks hit the banking sector hard (UniCredit, ING, Santander, and Intesa Sanpaolo fell by more than 4%).

The SNB, at its March meeting, kept the base rate at 0% for the third consecutive time. Despite extremely low current inflation, which stood at just 0.1% in February, the bank’s leadership sharply raised its future prognosis. The regulator expects the energy shock to accelerate price growth to 0.5% in 2026-2027, prompting the SNB to remain vigilant and ready to adjust its monetary tools. Markets paid particular attention to statements from SNB officials about their readiness for active interventions. The regulator is seriously concerned that excessive strengthening of the franc could choke Switzerland’s export-oriented economy.

On Friday, silver prices (XAG) showed a local rebound, rising above 74 dollars per ounce after yesterday’s drop to 65 dollars. Despite this increase, the asset is ending the week with a negative result for the third consecutive time. The main restraining factor remains the “hawkish” shift in interest rate expectations: investors increasingly prefer the US dollar and US Treasury bonds, whose yields are rising amid expectations of a prolonged fight against inflation. Although the Fed, ECB, and Bank of England kept rates unchanged this week, their rhetoric became extremely strict. The market has effectively capitulated to the reality of “higher-for-longer” rates: expectations for the first Fed rate cut have now officially shifted to 2027, while in Europe and the UK, traders are preparing for two hikes this year.

On Thursday, US WTI oil prices fell by 2% to 94 dollars per barrel, breaking a prolonged rally. The market cooled after a series of statements from Washington: President Donald Trump ruled out the possibility of sending ground troops to the Middle East. Additional skepticism among the “bulls” was introduced by intelligence chief Tulsi Gabbard, who pointed to divergences in the strategic goals of the US and Israel. These comments were interpreted by traders as a signal of de-escalation and the White House’s reluctance to get involved in a full-scale regional war. Despite the current decline, oil remains 50% more expensive than before the conflict due to the effective blockade of the Strait of Hormuz and sharp production cuts by major OPEC+ exporters. The market is shifting from a phase of panic buying to a phase of assessing long-term consequences.

The US natural gas prices jumped more than 2.5% to 3.144 dollars per MMBtu, instantly recovering early-week losses amid an unprecedented attack on the Persian Gulf’s gas infrastructure. Iran’s missile strikes on Qatar’s industrial city of Ras Laffan, a critical hub of global LNG exports, became a direct realization of Tehran’s threats following Israel’s attack on the South Pars field. Chaos in the region was compounded by the shutdown of facilities in Abu Dhabi (Habshan) due to falling missile debris and reports of massive shelling of LNG terminals in Bahrain, threatening global energy security. Despite the alarming external backdrop, US domestic data from the EIA showed a moderate inventory increase of 35 billion cubic feet, which typically pressures prices at the end of the winter season. However, under current conditions, the oversupply in US storage is completely offset by fears of a global market deficit.

Asian markets fell yesterday. Japan’s Nikkei 225 (JP225) dropped by 3.38%, China’s FTSE China A50 (CHA50) decreased by 0.92%, Hong Kong’s Hang Seng (HK50) fell by 2.02%, and Australia’s ASX 200 (AU200) posted a negative result of 1.65% on Wednesday.

In March 2026, the PBOC maintained the status quo, leaving key rates unchanged for the tenth consecutive month: the one-year LPR remained at 3%, and the five-year LPR at 3.5%. This caution is driven not only by uncertainty due to the war in Iran but also by the revision of the government’s GDP growth target to a more realistic 4.5-5%. With lowered expectations for economic growth, Beijing sees no urgent need for additional monetary stimulus, preferring to maintain financial system stability. Paradoxically, the sharp rise in oil prices may benefit China in its fight against prolonged deflation by pushing the Producer Price Index upward.