InvestMacro

Yesterday, US stock markets were hit by a wave of sell‑offs, completely erasing the previous day’s optimism. By the end of the day, the Dow Jones Index (US30) fell by 1.01%. The S&P 500 Index (US500) declined by 1.74%. The Technology Index NASDAQ (US100) closed lower by 2.38%. Donald Trump effectively disavowed reports of a peace agreement being prepared, stating during a cabinet meeting that the United States does not intend to make concessions to Tehran. This decision, combined with the resumption of US strikes on Iran’s energy infrastructure, brought back fears of a prolonged war and stagflation. Rising US Treasury yields across the curve triggered a massive investor exodus from the high‑tech and artificial‑intelligence sectors.

On Thursday, the CAD reached its lowest level in the past two months. Despite WTI oil prices holding above 92 dollars per barrel due to the effective blockade of the Strait of Hormuz, the commodity linkage of the Canadian currency could not offset the powerful rally of the US dollar. Investors are disappointed by the failure of diplomatic efforts.

The MXN weakened to 17.92 per US dollar, reaching its lowest level since the beginning of the month. The main blow to the currency came from the unexpected decision of the Bank of Mexico to resume the easing cycle: the regulator cut the key rate by 25 basis points to 6.75%. The decision split the board (votes were 3 to 2) and drew criticism from experts, as it was made amid a sharp acceleration of inflation, which jumped to 4.63% in mid‑March (compared to 4.02% in February).

On Thursday, European indices declined. Germany’s DAX (DE40) fell by 1.50%, France’s CAC 40 (FR40) closed down 0.98%, Spain’s IBEX 35 (ES35) dropped by 1.21%, and the UK’s FTSE 100 (UK100) closed 1.22% lower.

The Swiss franc weakened to 0.794 per US dollar, marking its lowest level since January. Despite its traditional status as a “safe haven,” the franc lost ground to the US dollar, which became the main beneficiary of the new wave of market fear. Additional pressure on the franc came from a “verbal intervention” by the SNB. Chairman Martin Schlegel confirmed that the bank is ready to actively sell francs on the market to prevent excessive strengthening, which harms Swiss exporters.

The US natural gas prices rose to 2.99 dollars per MMBtu, approaching the psychological level of 3 dollars. The driver of the increase was the weekly report from the EIA, which recorded a deeper‑than‑expected drawdown in inventories: 54 billion cubic feet were withdrawn from storage versus the expectation of a 44‑billion draw. This figure sharply contrasts with last year, when 33 billion cubic feet were injected during the same period, and with the five‑year average draw of 21 billion cubic feet.

Asian markets also rose mostly yesterday. Japan’s Nikkei 225 (JP225) fell by 0.27%, China’s FTSE China A50 (CHA50) rose by 0.34%, Hong Kong’s Hang Seng (HK50) declined by 1.89%, and Australia’s ASX 200 (AU200) posted a negative result of 0.10%.
The Australian dollar on Friday showed negative dynamics, falling to a two‑month low of around 0.687 US dollars amid growing anxiety over a prolonged energy crisis. At the same time, the rapid rise in fuel prices is creating serious risks for the domestic economy, provoking increased inflationary pressure and forcing households to cut spending. Analysts suggest that if high energy prices persist, the consumer price index could jump to 5% as early as the second quarter of this year.

Offshore yuan quotes (CNY) stabilized around 6.91 per US dollar, holding near their lowest levels in the past three weeks due to persistent investor pessimism caused by contradictory signals from the Middle East. However, the rapid decline of the Chinese currency was limited by the release of encouraging domestic statistics. China’s industrial sector showed an impressive surge at the start of 2026, with total corporate profits for the first two months rising more than 15% year‑on‑year, exceeding one trillion yuan. This dynamic indicates a strong economic recovery after last year’s stagnation.

On Wednesday, the US stock indices rose. By the end of the day, the Dow Jones Index (US30) increased by 0.66%. The S&P 500 Index (US500) rose by 0.54%. The Technology Index NASDAQ (US100) closed higher by 0.77%. The main catalyst for optimism was reports that Washington had sent Tehran a 15‑point peace proposal, sharply increasing the chances of a diplomatic exit from the Middle Eastern crisis. Against this backdrop, WTI oil prices and US Treasury yields declined, easing inflationary pressure and bringing investors back into risk assets, especially the technology sector. Semiconductor producers led the gains: AMD and Intel shares jumped more than 7%, and Nvidia added 2%, as investors once again began prioritizing growth stories amid easing inflation expectations. At the same time, the energy sector came under pressure due to the correction in oil prices, which led to declines in Exxon Mobil and Chevron shares.

European indices mostly rose. Germany’s DAX (DE40) jumped by 1.41%, France’s CAC 40 (FR40) closed down 0.36%, Spain’s IBEX 35 (ES35) gained 1.54%, while the UK’s FTSE 100 (UK100) closed up 1.42%. Investors reacted positively to signals from Washington indicating a desire for de‑escalation in the Middle East, interpreting this as the White House prioritizing the protection of the global economy from an inflationary shock. Despite Tehran’s formal rejection of the proposed ceasefire terms, the very fact that a diplomatic process had begun triggered a rally in risk assets and supported European government bonds.

WTI oil prices rose above 91.4 dollars per barrel, recovering after the sharp drop the day before. The market is being shaken by contradictory signals: while the Trump administration claims that “positive negotiations” are continuing through Pakistani intermediaries, Tehran officially rejected the American “15‑point plan.” Instead, Iran issued a counter‑ultimatum consisting of five conditions, including full recognition of its sovereignty over the Strait of Hormuz and payment of war reparations. This diplomatic stalemate, combined with new Iranian missile strikes on infrastructure in Kuwait and Saudi Arabia, brought the risk premium back into the market, overriding the temporary optimism from news of a possible ceasefire. Although Iran selectively allows passage for ships from “friendly” countries, US allies in the Asia‑Pacific region are already facing real shortages. The Philippines declared an energy emergency, and Australia and South Korea have reported hundreds of cases of fuel shortages at gas stations.

Asian markets also rose mostly yesterday. Japan’s Nikkei 225 (JP225) increased by 2.87%, China’s FTSE China A50 (CHA50) rose by 1.17%, Hong Kong’s Hang Seng (HK50) gained 1.09%, and Australia’s ASX 200 (AU200) posted a positive result of 1.85%.

The AUD remained at a seven‑week low below 0.695 US dollars, reflecting growing investor pessimism regarding a peaceful resolution of the Middle Eastern crisis. Statements from the RBA added fuel to the fire: Deputy Governor Chris Kent warned that the global oil shock puts the regulator in a difficult position. Since the war with Iran is simultaneously accelerating inflation and suppressing economic growth, the RBA intends to focus on preventing inflation expectations from becoming “entrenched,” which implies tighter monetary policy.

On Tuesday, US stock indices lost yesterday’s optimism. By the end of the day, the Dow Jones Index (US30) fell by 0.18%. The S&P 500 Index (US500) declined by 0.37%. The Technology Index NASDAQ (US100) closed lower by 0.77%. The main drag on the market was the renewed rise in energy prices after Tehran officially denied Donald Trump’s statements about “productive negotiations.” Investor skepticism instantly pushed Brent crude back above 104 dollars per barrel, triggering a two‑percent jump in the energy sector – the only group within the S&P 500 that maintains positive returns for March. The high‑tech segment came under double pressure: geopolitical uncertainty overlapped with profit‑taking in leading artificial‑intelligence stocks. Oracle shares plunged 4.7%, despite analysts reaffirming positive predictions, and Microsoft shares also faced selling pressure.

It is also another day of disappointment for the CAD: the currency weakened to 1.375 per US dollar, updating from a two‑month low. Despite Canada being a major oil exporter, the loonie is not benefiting from rising energy prices. The reason lies in the strong demand for the safe‑haven US dollar. Investors are concerned that ongoing attacks on US bases in the Persian Gulf will keep oil prices at a high “war premium,” making inflation unmanageable.

The Mexican peso lost momentum in its recent recovery and fell below 17.8 per US dollar. The situation for the Bank of Mexico is complicated by fresh inflation data. The mid‑March reading came in at 4.63%, above analysts’ expectations. This puts the regulator in a “stalemate”: on one hand, the economy needs support due to a sharp production downturn; on the other, accelerating inflation and a weakening currency prevent monetary easing. In conditions where Mexico’s key trading partners are preparing for a prolonged period of high rates, the peso remains under crossfire from domestic stagnation and a global inflation shock.

European markets mostly rose. Germany’s DAX (DE40) fell by 0.08%, France’s CAC 40 (FR40) closed up 0.23%, Spain’s IBEX 35 (ES35) gained 0.13%, while the UK’s FTSE 100 (UK100) closed up by 0.72%. The main driver of growth was the technology sector, where ASML shares became the true star of the session. The Dutch giant’s stock jumped after news of a colossal order from South Korea’s SK Hynix for lithography equipment worth 8 billion dollars, confirming sustained demand for memory‑chip production capacity despite global instability. However, the overall picture remains troubling due to the continued rise in oil prices. The first official confirmation of these concerns came from preliminary March business‑activity data: Eurozone private‑sector growth slowed, clearly showing that high energy costs have already begun to erode industrial output.

The oil market showed a partial recovery after Monday’s collapse. WTI crude futures jumped 5%, reaching 92.4 dollars per barrel. This rise compensated for only half of Monday’s catastrophic 10.3% drop, as investors remain in extreme uncertainty regarding the true intentions of Washington and Tehran. Saudi Arabia and the UAE, whose territories were attacked, made it clear that their patience is running out. Reports emerged that Riyadh is seriously considering direct military strikes on Iranian facilities if its critical energy infrastructure is targeted again. The market is essentially frozen, awaiting the end of the five‑day period, after which it will become clear whether the conflict will escalate into a global energy collapse.

Asian markets also rose mostly yesterday. Japan’s Nikkei 225 (JP225) partially recovered by 1.43% higher, China’s FTSE China A50 (CHA50) fell by 2.15%, Hong Kong’s Hang Seng (HK50) rose by 2.79%, and Australia’s ASX 200 (AU200) posted a positive result of 0.16%. The Hang Seng Index rose by 0.9% on Wednesday, marking its second consecutive session of gains. The positive dynamics were driven by temporary stabilization in oil prices and a diplomatic pause in the Iran‑related conflict, allowing investors to ease fears of an immediate energy collapse. This optimism helped slow the massive outflow of foreign capital from Asian assets caused by the recent surge in global bond yields and stagflation fears.

On Wednesday, the Australian dollar fell to 0.70 US dollars, approaching a two‑week low. Pressure on the currency came from fresh inflation data in Australia: in February, consumer prices were unchanged month‑over‑month, while the annual figure slowed to 3.7% (down from 3.8%). Although inflation still exceeds the Reserve Bank of Australia’s target range (2-3%), weaker‑than‑expected numbers made markets doubt the need for an aggressive rate hike in May, the probability of which is now seen as 50/50.

The NZD fell to 0.582 US dollars as investors sharply revised their expectations regarding the RBNZ policy stance. The trigger was statements from Governor Anna Breman and Chief Economist Paul Conway, who made it clear that the regulator intends to “ignore” temporary inflation spikes caused by the war with Iran and rising oil prices. While earlier the market priced in a 68% probability of a rate hike in May, expectations collapsed to 44% after these comments, as the bank still sees signs of an economic slowdown and fears that excessive tightening could suppress domestic demand.

On Friday, trading on the US stock market ended with a decline. The Dow Jones Index (US30) fell by 0.96% (down -2.42% for the week). The S&P 500 Index (US500) dropped by 1.51% (down -2.52% for the week). The tech-heavy NASDAQ (US100) closed lower by 1.88% (down -3.04% for the week). The main trigger for the sell-off was news from Iraq, where force majeure was declared at all oil fields, which, combined with the Pentagon’s preparations to deploy additional Marine forces to the Persian Gulf, created an explosive mix of geopolitical and energy shock. WTI crude continued its ascent, ignoring stabilization attempts made by the US administration earlier in the week. Against this backdrop, investors reacted even more sharply to the Fed’s decision to keep rates in the 3.50-3.75% range, realizing that policy easing amid “wartime” inflation should not be expected.

Bitcoin (BTC/USD) stabilized around 68,000 dollars, holding near two‑week lows. The digital assets market came under heavy pressure from a global risk‑off move triggered by a critical escalation in the Middle East. Direct threats from President Trump to destroy Iran’s energy infrastructure in response to the blockade of the Strait of Hormuz, along with Tehran’s counter‑warnings of strikes on US and Israeli facilities, created an atmosphere of extreme uncertainty in which investors prefer to exit volatile digital assets. Since the start of the active phase of the war, Bitcoin has lost more than 20% of its value, continuing its downward trend. The status of “digital gold” has not worked in current conditions: the digital asset is showing high correlation with falling stock indices and other risk assets.

European stock markets ended trading with a deep decline, as the specter of stagflation became a frightening reality for investors. Germany’s DAX (DE40) fell by 2.01% (down -4.69% for the week), France’s CAC 40 (FR40) closed down 1.82% (down -3.22% for the week), Spain’s IBEX 35 (ES35) dropped by 1.14% (down -1.92% for the week), and the UK’s FTSE 100 (UK100) closed down by 1.44% (down -3.34% for the week). The main driver of pessimism was the uncontrolled rise in energy prices, which, combined with slowing economic growth, puts Europe’s industrial sector in an extremely vulnerable position. Europe’s tech sector came under heavy pressure from global sell‑offs: shares of semiconductor giant ASML and software developer SAP plunged more than 3.5% lower each. Investors are dumping growth stocks, fearing that high borrowing costs and energy shortages will undermine the long‑term profitability of the tech sector. At the same time, a large‑scale exit from sovereign bonds continues, pushing yields higher and directly hitting the capital of major banks. Against this backdrop, UniCredit shares fell nearly 4%, while BNP Paribas, Intesa Sanpaolo, and Nordea lost more than 2% of their market value.

On Monday, the oil market entered a state of extreme volatility: WTI crude futures traded above 98 dollars per barrel, having touched the psychological mark of 101.5 dollars at the start of the session. Investors around the world froze in anticipation of the expiration of President Donald Trump’s ultimatum demanding that Tehran immediately unblock the Strait of Hormuz. The White House’s direct threat to “destroy” key Iranian power plants by the end of Monday pushed the conflict into a phase of a possible full‑scale energy war. Tehran’s response only added fuel to the fire: Iranian leadership promised massive strikes on US and Israeli facilities in the region, targeting not only energy infrastructure but also critical desalination and IT nodes.

On Friday, silver prices (XAG/USD) fell another 5% down, reaching 69.5 dollars per ounce. Thus, the asset lost 14% of its value over the week, marking its worst performance in recent months. The main reason for the sell‑off was the market’s realization that the conflict in the Middle East would not lead to a quick rate cut. On the contrary, the sharp surge in oil and gas prices intensified inflation fears, forcing investors to shift their strategies toward the dollar and US treasuries. Pressure on prices increased after news of the expanded US military presence in the conflict zone. This development radically changed traders’ expectations: the probability of a Fed rate hike by October is now estimated at 50%. In Europe and the UK, the situation looks even more tense – the market is already pricing in at least three rate hikes by the ECB and the Bank of England by the end of 2026.

Asian markets also mostly declined last week. Japan’s Nikkei 225 (JP225) fell by 0.55% over the trading week, China’s FTSE China A50 (CHA50) rose by 0.63%, Hong Kong’s Hang Seng (HK50) dropped by 0.45%, and Australia’s ASX 200 (AU200) posted a five‑day decline of 1.72%.
On Monday, Hong Kong’s Hang Seng Index experienced one of its toughest trading days, plunging more than 3% down. This drop pushed the indicator back to the August 2025 lows, completely erasing its yearly gains amid a global flight from risk assets. The main pressure factor was fear of prolonged stagflation. The surge in oil prices due to the blockade of key maritime routes not only hits production costs in the region but also forces global central banks to prepare for a new cycle of rate hikes to contain inflation. For Hong Kong, whose monetary policy is tightly pegged to the US dollar, this means an inevitable rise in borrowing costs, which investors view extremely negatively amid the economic downturn.

The NZD came under heavy pressure, falling to 0.581 per US dollar. The currency approached a two‑month low amid extremely negative news flow. The main blow to the kiwi was Fitch Ratings’ decision to downgrade New Zealand’s credit rating outlook to “negative,” reflecting experts’ skepticism about the government’s ability to reduce public debt after a prolonged budget pause.