MARKET WRAPS
European shares were edging up, tracking oil, after indexes mostly opened in the red.
Investors were increasingly expecting an extended conflict in the Middle East, and moving away from an initial consensus for dip buying , J.P. Morgan said.
“That capitulation in sentiment, in our view, suggests that if one is selling now, the risk of being whipsawed is increasing.”
However, “We suspect the escalation is unlikely to stick for long given political calendars, and we find the fundamental backdrop as constructive.”
Jefferies said it remained in a low-risk mode, but was turning a little more positive and starting to look selectively at possible opportunities.
The strategy of buying the dip would focus on markets where the move has been driven more by position-squaring, it added.
Jefferies would also build some positions in short-dated U.K. and European debt, and cited assets which are relatively agnostic to the length of the war, including defense, commodities and nuclear as other areas of interest.
It added it would also differentiate between countries and sectors which are more impacted by energy disruption and would fare poorly in a stagflation scenario.
Meanwhile, Union Bancaire Privee reviewed its short-term allocations a s disruption to the Strait of Hormuz persisted, cutting duration across all currencies, scaling back its sterling duration overlay and reducing exposure to emerging-market local currency bonds.
U.S. Markets:
Stock futures drifted lower after all three indexes rallied to a higher close Monday.
Earnings are due from Lululemon Athletica, Docusign.
Forex:
The euro was at risk of falling unless there are positive developments in the Middle East, ING said, adding that the currency could drop below $1.1450 this week.
The euro’s recovery against the dollar on Monday “may have short legs unless some headlines on ceasefire talks or NATO coordination on securing Hormuz start to appear.”
The dollar rose as oil rebounded.
“The war has so far driven a terms-of-trade shock, real rate spread widening and tighter financial conditions, all benefiting the U.S. dollar, and we see little chance for a quick reversal,” Danske Bank said.
Bonds:
Trade in eurozone government bonds was quiet, with yields edging slightly lower.
The region’s bonds showed little reaction to a renewed rise in oil prices above $100 for now, as investors turn their focus to this week’s central bank decisions, including the ECB on Thursday.
“The constructive tone has scope to extend ahead of the central bank avalanche kicking off tomorrow,” Commerzbank said.
Mediolanum International Funds said that with close to two ECB rate hikes now priced, “it may be difficult for the March meeting to push front–end yields materially higher.”
“However, if the ECB places greater emphasis on downside growth risks or signals a willingness to look through higher inflation for a period, there is scope for yields to retrace lower.”
Treasury yields rose across the curve as elevated oil prices-with Brent above $100 per barrel-continued to weigh on sentiment.
Yields were rising in a steepening manner, with more increases in long-dated Treasury yields than in short-dated ones.
“Concerns about supply of oil have this morning again lifted the oil price,” SEB said.
TD Securities said the pricing out of Fed rate cuts in the wake of the oil price surge had helped push Treasury yields higher, but they were still expected to remain rangebound.
“We continue to expect the 4.0%-4.3% range to persist for now.”
Energy:
Oil prices rose as U.S. allies rebuffed Trump’s call to help unblock the Strait of Hormuz, which remains largely closed.
The benchmarks settled lower in the previous session on reports that some vessels were able to get through the strait.
“Continued tensions are keeping oil bulls well awake,” Swissquote said.
“The geopolitical outlook remains fragile, making oil prices more prone to further upside than a sustained decline.”
Prices were also supported by continued attacks against key energy infrastructure in the region, most recently at the Fujairah Oil Industry Zone in the UAE.
OCBC said the oil market was projected to face a daily shortfall of around 10 million barrels a day from a prolonged, near-total closure of the Strait of Hormuz, as it raised its Brent projection to $100 a barrel through midyear, from below $70.
Morningstar maintained its $65 a barrel midcycle forecast for Brent crude and assigned a low probability of raising it from the possible destruction of Iran’s oil infrastructure.
It added that prolonged supply bottlenecks could lead to some demand destruction and that economic recession was a watch item.
Goldman Sachs said the war was causing the largest oil supply shock on record, with refined products rallying more sharply than crude.
Rising freight rates, higher natural gas costs, and trade restrictions could push prices even higher, it added.
Julius Baer said elevated oil prices were unlikely to last, with safe passage by “Iran-friendly” ships a development to watch.
Gas
Natural-gas prices climbed .
Shipping traffic through the Strait of Hormuz is expected to remain minimal until early April, while LNG production in Qatar and the UAE is projected to return to full capacity gradually by the second half of May, according to Rystad Energy.
“Disruptions to Middle Eastern LNG supply have shifted price formation toward Asia, where more than 85% of Qatar and UAE LNG volumes were delivered in 2025.”
“Europe is expected to require an additional 18 million tonnes of LNG year-on-year in 2026, meaning TTF prices will largely be determined by a no-arbitrage condition.”
Metals:
Gold ticked higher.
“Although emergency oil stockpiles releases have helped temper price spikes, rising inflation risks have reduced expectations for a Fed rate cut, with higher interest rates typically weighing on non-yielding assets like gold,” MUFG said.
Silver futures also rose.
Base Metals
Copper fell and aluminum was higher after electronic trading on the LME resumed on Monday following an outage of nearly three hours.
EMEA HEADLINES
German Financial Sentiment Craters on Iran War
Confidence among German investors cratered this month amid surging energy prices as the conflict in the Middle East continues.
The ZEW Indicator of Economic Sentiment, which this month tracked the expectations of 178 analysts and investors at banks, insurance companies and other businesses, fell to minus 0.5 in March compared with 58.3 in February.
Audi Expects Profitability to Improve This Year as Work Continues to Cut Costs
Audi expects profitability to improve this year as it continues to work through a performance program that seeks to cut costs and boost its efficiency and competitiveness.
The German automaker, which is part of Volkswagen Group, said Tuesday that it expects to report an operating margin of between 6% and 8% this year, up from 5.1% in 2025.
BNP Paribas Targets Asset-Management Growth Under 2030 Plan
BNP Paribas is targeting a near doubling in pretax income from its asset-management unit by 2030 under a new strategic plan for the division after the acquisition of AXA’s money-management arm.
The Paris-based bank is seeking an increase in size and profits at the asset-management business after the 5.1 billion-euro ($5.87 billion) deal with insurer AXA, which was completed last summer. The bank hopes growth in asset management can help it meet a companywide target of a return on tangible equity of 13% by 2028. This is a key profitability metric for the bank.
British Airways Extends Suspension of Flights to Middle East
British Airways said it would extend the suspension of flights to the Middle East amid the ongoing conflict.
The IAG-owned airline said Monday that flights to Amman, Bahrain, Dubai and Tel Aviv have been canceled until May 31, while flights to Doha are canceled until April 30. This was “due to the continuing uncertainty of the situation in the Middle East and airspace instability, and to provide more clarity to our customers,” it said.
GLOBAL NEWS
Oil Holds Above $100 as Iran Escalates Attacks Against Key Infrastructure
Brent crude held above $100 a barrel as Iran stepped up attacks on key energy infrastructure in the Middle East and U.S. allies rebuffed President Trump’s call to help reopen the Strait of Hormuz.
In mid-morning European trading on Tuesday, Brent crude rose 2.6% to $102.81 a barrel after reaching nearly $105 earlier in the session, while West Texas Intermediate gained 3.1% to $91.25 a barrel. Both benchmarks had closed lower on Monday on signals that some vessels were able to transit the strait.
Oil Prices Rise. Israel Says It Has Killed Iran’s Security Chief: Report.
Oil prices were rallying early Tuesday as Iran stepped up its attacks on energy infrastructure in the Middle East.
Brent international futures climbed 2.6% to $102.81 a barrel and West Texas Intermediate futures were 2.6% higher at $95.96 a barrel.
Iran Unleashes New Crackdown on Its People to Head Off Uprising
Iran’s rulers have unleashed a new crackdown against domestic dissent, arresting people suspected of collaborating with foreign entities and threatening would-be protesters with death to hold back the risk of an uprising.
Iranian security forces have been battered by U.S. and Israeli attacks. Bombing raids have shattered the headquarters and command posts of Iran’s police, the paramilitary Islamic Revolutionary Guard Corps and the plainclothes Basij militia.
Israel Invades Lebanon, Opening New Front Against Iran
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March 17, 2026 07:10 ET (11:10 GMT)
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