GGMA Morning Brief: Markets: Stock markets fall as oil prices rise / China’s PBOC extends gold buying, CPI jumps / UK jobs market nears stabilisation / Today: Swiss sight deposits, US inflation exp.
Good morning,
I hope all is well.
Here are the main overnight news and market movers:
Markets: Stock markets under pressure as oil prices jump higher
The rise in oil prices and the tensions in the Middle East are the dominant themes for now. As a result, we are in risk-off mode, with stocks lower and the US Dollar firmer. Bonds don’t act as a safe haven for now, and yields rise due to inflation fears. Bitcoin, interestingly, is up this morning.
Oil initially spiked to as high as 118$ but then retreated, and equities trimmed declines after the Financial Times reported that Group-of-Seven countries will discuss a possible joint release of petroleum from reserves, helping cap the surge in energy costs.
Asian equity markets suffered a severe selloff Monday morning as the escalating Iran conflict drove crude oil above $100 and sparked fears of stagflation across the region. Japan’s Nikkei 225 futures plunged 5.33%, while South Korea’s KOSPI fell nearly 6%, triggering circuit breakers for the second time in four sessions. India’s Nifty 50 dropped 2.34%, and Hong Kong’s Hang Seng fell 1.6%, with the Shanghai Composite relatively resilient at -0.6%. US equity futures pointed to a weak open with S&P 500 futures down 1.42% and Nasdaq 100 futures off 1.49%, while European DAX futures fell 2.23% and Euro Stoxx 50 futures declined 2.3%. Volatility surged with the VIX at 28.0 (+3.84%) and VSTOXX futures up 11.62%. Veteran strategist Ed Yardeni raised the probability of a market meltdown to 35% from 20%. Asia’s benchmark share index pared its drop to less than 4% after the FT reported G7 nations would discuss a joint release of emergency petroleum reserves.
Market Snapshot
Source: Tradingview.com
Iran-US Conflict: Summary of Developments
The US-Iran conflict has entered its second week with no clear path to de-escalation, as the Trump administration simultaneously pursues military pressure and attempts to stabilise rattled energy markets.
US strategy and demands
President Trump is demanding Iran's capitulation but has so far stopped short of committing ground troops, saying a "good reason" would be needed for that step. Defence Secretary Hegseth has stated that Trump will "set the terms" of any Iranian surrender. The administration is also reportedly considering a special operation to seize Iran's uranium stockpile, signalling that the nuclear dimension of the conflict remains a central concern. Trump has indicated the US may expand its target set inside Iran as the war escalates.
Israeli operations and US tensions
Israel has continued striking fuel depots inside Iran as the conflict stretches on, but these attacks on energy infrastructure have drawn US displeasure. According to Axios, Washington is dismayed by Israel's targeting of Iranian fuel facilities — likely because such strikes risk deepening the oil shock the administration is trying to contain. Trump has said that ending the war will be a "mutual" decision made in coordination with Israeli Prime Minister Netanyahu.
Regional fallout
The conflict's ripple effects are spreading across the Gulf. Iran has struck a key US radar installation, raising serious concerns about missile defence gaps in the region. The State Department has reportedly ordered diplomats in Saudi Arabia to leave, suggesting fears of a widening theatre of operations. Saudi Arabia has warned Iran not to attack it and has signalled it could retaliate if drawn in. Meanwhile, Ukraine has sent drone defence experts to help protect US bases in Jordan — a notable example of Kyiv leveraging its battlefield expertise to strengthen its relationship with Washington.
Iran's internal response
Amid the escalation, Iran has selected new leadership, a move that comes as the war deepens an already significant oil shock with global implications for energy prices.
Sources: Bloomberg, Wall Street Journal, New York Times, Axios, Reuters, CBS, Times of Israel
Yardeni raises odds of market meltdown to 35% on Iran war risks
US stocks are facing a growing risk of a sharp selloff this year as the escalating war in Iran hurts global markets, according to veteran strategist Ed Yardeni, updating his outlook for what he describes as “fast-moving times.” Yardeni has raised the probability of a market meltdown to 35% for the rest of the year, up from 20% previously. At the same time, he slashed the odds of a meltup — a rally driven more by investor enthusiasm than underlying fundamentals — to just 5% from 20%. (BBG)
China’s PBOC extends gold buying as Middle East tension simmers
China’s central bank increased its gold reserves for the 16th straight month in February, adding 30,000 troy ounces to reach 74.22 million fine troy ounces, according to official data. (BBG)
China CPI surges to three-year high at +1.3%; PPI deflation eases
China’s consumer price index surged 1.3% year-on-year in February 2026, far exceeding the 0.8% consensus and marking the highest reading since January 2023. Core CPI climbed 1.8%, matching the pace last seen in March 2019. On the producer side, PPI fell 0.9% year-on-year, better than the -1.1% consensus and an improvement from -1.4% in January, marking the smallest decline since July 2024. (CNBC, MarketScreener)
UK jobs market nears stabilisation as hiring decline hits three-year low
The February 2026 KPMG and REC UK Report on Jobs found that permanent staff hiring is close to stabilising, with the smallest decline in nearly three years, while temp billings also fell only modestly. Demand for workers continued to soften, but at the slowest pace in nine months, and pay pressures eased as both starting salaries and temp wages grew more slowly, remaining below long-run averages. Meanwhile, candidate availability rose sharply, particularly among permanent workers. Industry leaders noted the jobs market is showing its strongest signs of improvement in three years, but cautioned that global economic uncertainty could delay a full recovery. (S&P Global)
Today’s Macro Roadmap: Swiss consumer confidence & sight deposits, US inflation expectations, ECB speak
Today’s data calendar is very light with no major releases.
In Switzerland, the SNB will release its update on sight deposits for last week at 10:00 CET. They are far from a perfect proxy for SNB interventions in foreign exchange markets and are influenced by other factors, yet they remain worth monitoring. In its latest statement, the central bank reiterated its willingness to intervene as necessary. Swiss National Bank Vice-President Antoine Martin said last week the central bank’s willingness to intervene to stem gains in the franc has risen amid fallout in global markets from the US war in Iran. “Our willingness to intervene, our readiness to intervene, is higher given the recent political event,” Martin said at a press conference on new Swiss banknotes. The remarks reiterated a surprise statement earlier in the week in which the SNB threatened to intervene in the currency market. Martin didn’t comment further on the exchange rate. (SwissInfo)
In the US, the New York Fed’s Survey of Consumer Expectations for February arrives late in the day. Prior reading was 3.1%. Given the oil price surge and Middle East headlines, there is clear upside risk to inflation expectations.
On the policy maker front, ECB’s Elderson speaks at 11:30 CET at the NGFS annual plenary hosted by the South African Reserve Bank in Pretoria. The topic is climate and nature-related financial risk — this is Elderson’s core portfolio as ECB Supervisory Board Vice-Chair. Given the supervisory focus, direct monetary policy signals are unlikely. However, any comments on energy transition risks or financial stability implications of the oil shock could be market-relevant. The ECB enters its quiet period on Thursday ahead of the March 19 rate decision.
Good luck today, and feel free to ping me in the chat to discuss markets and views!