Oil prices are holding around 95 dollars per barrel. Bank Indonesia kept its key rate unchanged

On Tuesday, the US stock indices closed in the green zone, continuing to recover after falling to four‑month lows. By the end of the day, the Dow Jones Index (US30) rose by 0.10%. The S&P 500 Index (US500) gained 0.25%. The Technology Index Nasdaq (US100) closed higher by 0.47%. Investors remain optimistic, believing that the energy shock in the Persian Gulf will not turn into prolonged stagflation, despite ongoing strikes on Iranian infrastructure. The main driver of the day was the asset‑management sector: shares of KKR, Blackstone, and BlackRock jumped by 3-5% amid a reassessment of default risks in the technology sector, which restored confidence in major private lenders.

The upcoming FOMC meeting promises to become a true turning point for the market, as it takes place against the backdrop of an important leadership change at the Federal Reserve and escalating geopolitical tensions in the Middle East. Leading investment banks expect the benchmark rate to remain unchanged in the current range of 3.50-3.75%. However, all attention will be focused on the updated “dot plot” prognosis. Given that core inflation remains around 3% and uncertainty persists regarding the end of Jerome Powell’s term, the Fed will likely take a “hawkish pause,” signaling its readiness to keep rates high for longer than markets expected at the beginning of the year.

On Monday, European markets showed a confident rebound. Germany’s DAX (DE40) rose by 0.71%, France’s CAC 40 (FR40) closed up 0.49%, Spain’s IBEX 35 (ES35) gained 0.93%, and the UK’s FTSE 100 (UK100) closed positive 0.83%.
On Tuesday, WTI oil prices rose by more than 2%, climbing to 96 dollars per barrel and partially recovering the previous day’s decline. The market reacted instantly to a new wave of escalation: reports of Israel eliminating high‑ranking Iranian security officials were accompanied by massive Tehran attacks on the energy infrastructure of US allies. The shutdown of the “Shah” gas giant in the UAE, strikes on Iraqi fields, and renewed blockades of terminals in Fujairah intensified fears that supply shortages will become chronic as the war enters its third and most destructive phase. Despite the start of commodity interventions from US strategic reserves, the overall supply picture remains critical: the Strait of Hormuz is effectively paralyzed, and oil prices have surged more than 40% since the beginning of the conflict.

Asian markets also rose mostly yesterday. Japan’s Nikkei 225 (JP225) fell by 0.09%, China’s FTSE China A50 (CHA50) jumped by 0.04%, Hong Kong’s Hang Seng (HK50) gained 0.13%, and Australia’s ASX 200 (AU200) posted a positive result of 0.36%. The internal driver was strong macroeconomic data from China for the first two months of the year: industrial production grew by 6.3%, and retail sales by 2.8%, exceeding analysts’ prognoses and supporting the real estate and financial sectors.

On Wednesday, the Australian dollar (AUD) consolidated above 0.701 per US dollar, holding near multi‑year highs. A direct warning from Michele Bullock that current policy may still be insufficiently tight to suppress inflation forced markets to price in another rate hike in May and a high probability of an additional move in August. Against the backdrop of domestic monetary tightening, the Australian dollar also benefits from its role as a “commodity currency” during an energy crisis. Intensifying Iranian attacks on regional oil infrastructure and the refusal of US allies to support Donald Trump’s call for military convoy protection of ships are keeping commodity prices high, which traditionally benefits Australia’s economy.

At its March 2026 meeting, Bank Indonesia (BI) kept the key interest rate at 4.75%, fully in line with analysts’ expectations. The regulator found itself in a difficult position: on one hand, the economy is showing impressive growth (GDP in Q4 2025 accelerated to 5.39%), while on the other, inflation in February made a sharp jump to 4.76%, exceeding the upper boundary of the target range (2.5% ±1%). Despite current volatility and the global energy shock, the central bank maintains optimistic GDP growth projections for 2026 in the range of 4.9-5.7%. In the coming months, market attention will focus on whether Bank Indonesia will take additional steps to intervene in support of the rupiah if the psychological level of 17,000 per dollar is breached.