Market drivers and catalysts
Equities: Global stocks fell as the US and Europe closed lower and Asia sold off sharply on rising energy and rate fears.
Volatility: Iran risk, oil-driven inflation fears, post-expiry repositioning, PMI data focus
Digital Assets: risk-off tone, bitcoin relative strength, IBIT/ETHA outflows
Fixed Income: Global bonds under massive pressure on inflationary fears, US & European yields hitting new cycle highs.
Currencies: USD bounces back, but sees little safe haven appeal. AUD weak
Commodities: Gold pressured by liquidity demand; energy prices remain supported as Hormuz tensions escalate
Macro events: ECB, Fed speakers, Japan Feb. National CPI (early Tue.)
Macro headlines
Trump issued a 48-hour ultimatum (ending late Monday) to Iran to open the Straits of Hormuz or face an attack on Iranian power plants. Iran has signaled it will not back down and will hit energy and IT infrastructure belonging to the US and Israel.
Israel said it had begun “a wave of extensive strikes targeting infrastructure” in Iran, with large explosions heard in Tehran.
Iran’s Revolutionary Guards warned that if President Trump targets Iran’s energy facilities, the Strait of Hormuz will close until repairs are made, and Israeli power plants and infrastructure will be targeted.
Canadian retail sales are estimated to have risen by 0.9% in February 2026, following a 1.1% increase in January. Motor vehicle sales rose by 2%, while gasoline sales fell by 0.4%. Retail turnover grew by 1.5% year-on-year in February.
The UK's order book balance improved to -27 in March 2026, surpassing expectations. Industrial orders are declining at the slowest rate since September. Output expectations rose to -3, and price growth eased to +12. CBI economist Cameron Martin warned of rising energy costs and supply chain disruptions due to the Middle East conflict.
Macro calendar highlights (times in GMT)
0845 – ECB’s Escriva to speak in Madrid
1230 – US Chicago Fed National Activity Index
1245 – US Fed’s Stephen Miran to appear on Bloomberg TV
1500 – ECB’s Cipollone to speak in Brussels
1600 – ECB’s Lane to speak in Frankfurt
2000 – New Zealand RBNZ Governor Breman to speak.
2330 – Japan Feb. National CPI
Earnings this week
Tuesday Gamestop
Wednesday: PDD Holding, Paychex
Friday: Carnival
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 fell 1.5%, the Nasdaq dropped 2.0% to a six-month low, and the Dow lost 1.0% as the Iran war entered a fourth week and oil-driven inflation fears kept investors in risk-off mode. The Fed’s decision to hold rates at 3.50% to 3.75% added to the higher-for-longer mood, while Treasury yields kept climbing. Micron fell 4.8% as investors focused on its bigger spending plans, Super Micro tumbled 33.3% on chip-smuggling charges tied to former associates, and FedEx rose 0.8% after upbeat guidance. Markets now watch whether oil calms down, though it is not exactly behaving like a calming influence.
Europe: The Euro STOXX 50 fell 2%, the STOXX 600 lost 1.8%, and the FTSE 100 dropped 1.4% as Europe again wore the energy shock more heavily than most. Investors reacted to rising oil and gas prices, a selloff in government bonds, and fresh talk that the European Central Bank may still need two rate hikes this year after holding rates steady last week. Financials and energy each fell 2.0%, while Unilever rose 0.5% after confirming talks to sell its foods business and Infineon added 1.5% after it was raised to overweight at JPMorgan. The next test is whether inflation fears stay confined to energy or spread into the broader economy.
Asia: Asian equities traded sharply lower on Monday rather than offering investors a helpful change of scenery. Japan’s Nikkei fell 3.5%, South Korea’s market dropped 5.8%, China’s CSI 300 lost 2.4%, and MSCI Asia-Pacific ex-Japan fell 3.2% as Trump’s 48-hour ultimatum over the Strait of Hormuz and Iran’s retaliation threats sent oil higher and rate fears even higher. In Seoul, Samsung Electronics fell 5.0%, SK Hynix lost 5.5%, and Naver dropped 4.7% as foreign and local investors sold across the board. Asia now looks set to keep taking its cues from oil, shipping disruptions, and whether the war rhetoric cools at all.
Volatility
Volatility remains elevated as markets continue to be driven more by macro risks than company-specific news. The Iran conflict has entered its fourth week, keeping oil prices elevated and reinforcing concerns about inflation and slower growth. For investors, this matters because sustained energy pressure can delay potential rate cuts and weigh on confidence. Markets are also still adjusting after last Friday’s triple witching, which typically leads to repositioning and less stable price action at the start of the new week. This week’s PMI releases and consumer sentiment data will be closely watched for early signs of how the energy shock is feeding into the real economy.
Based on current SPX options pricing, the market is expecting a move of roughly ±178 points (±2.74%) into 27 March, while today’s expected move is around ±88 points (±1.35%). Today’s options positioning shows a mild upside skew, with calls slightly more expensive than comparable puts near current levels, suggesting investors are not aggressively positioning for a sharp downside move into today’s close.
Digital Assets
Digital assets are softer again, with bitcoin holding up better than the broader complex. Bitcoin is trading near $67,800, while ether is weaker around $2,035, and altcoins such as Solana (~$85.6) and XRP (~$1.37) continue to drift lower. The main driver remains macro: rising geopolitical tensions linked to Iran are pushing investors away from risk assets, and crypto is currently trading more in line with equities than behaving as a safe haven.
ETF flows remain a headwind. Recent data shows continued outflows from both bitcoin and ethereum ETFs, including IBIT and ETHA, highlighting still-cautious institutional positioning. Options activity also reflects a mixed picture, with selective upside positioning in names like MicroStrategy, but clear hedging in Coinbase, ETF products, and crypto miners. For investors, the takeaway is straightforward: bitcoin continues to show relative strength, but broader crypto sentiment remains fragile without a sustained return of inflows.
Fixed Income
US treasuries sold off sharply on Friday all along the yield curve on concerns the war in Iran would drive a sustained inflationary impulse. The benchmark 2-year yield rose over ten basis points from 3.79% to close near 3.90% and rose another few basis points in early Monday trading to 3.93%, which now means that the market is pricing that the next FOMC rate decision is more likely to be a rate hike sometime later this year. The benchmark 10-year treasury yield rose 13 basis points from a 4.25% close Thursday to close near 4.38% Friday and rose clear of 4.40% in early trading Monday, the highest levels since last July.
Europe’s government debt yields soared again on the latest rise in energy prices for Europe and as the pressure mounted on US treasuries. The benchmark 2-year German Schatz rose another eight basis points to close at 2.67% Friday, it’s highest level since last July, while the 10-year benchmark 10-year German Bund yield rose some eight basis points and closed at 3.04%, its highest level since 2011. Intra-Eurozone yield spreads are on the rise again on the pressure on European bonds. The Germany-France 10-year yield spread widened three basis points Friday to 71 basis points, matching its widest level this year and up from a pre-Iran war February low of 55 basis points.
Japan’s government bonds sold off Monday on the pressure on global bond markets, with the benchmark 2-year JGB yield up over two basis points near 1.30% in late trading hours Monday in Tokyo, just a few basis points of the cycle highs posted earlier this year (which are the highest level since 1996). Further out the curve, the benchmark 10-year JGB yield rose almost three basis points to 2.305%, still short of the multi-decade high of 2.36% posted in January.
Commodities
The slump in precious metals continue with gold trading below USD 4,200 after its steepest weekly decline since 1983, as the Middle East conflict triggers a broad macroeconomic shock and forces a repricing across global asset markets. Over the past month, oil-driven inflation risks have reversed US rate expectations from cuts to potential hikes. With both bonds and equities under pressure, a stronger dollar and rising volatility have turned gold into a source of liquidity. For now, this dynamic has faded but not removed reasons why gold rose strongly in the past few years. Gold is homing in on its 200-day moving average at USD 4,090, a level last touched in late 2023.
Oil prices remain bid after Trump warned Iran to reopen the Strait of Hormuz within 48 hours or face strikes on power infrastructure, while Tehran vowed to target key regional assets in response. Refined fuel products—including diesel and petrochemicals—continue to signal acute tightness, while crude has so far been cushioned by an initial overhang of supply stranded at sea at the onset of the conflict. That buffer is now being steadily eroded as floating storage declines. The gasoil (diesel) margin relative to Brent has moved above levels seen during the 2022 Russia-driven spike, while jet fuel in Singapore is trading at an unprecedented USD 222 per barrel—up 137% since the war began.
Currencies
The US dollar bounced back slightly Friday but does not seem to offer compelling safe haven status in the market at the moment. While global equity markets hit new lows since the breakout of war in Iran on Friday, the greenback merely rebounded slightly from a sharp post-FOMC sell-off. EURUSD trades early Monday in Europe near 1.1540 after a close on Friday near 1.1570, while USDJPY rose slightly to 159.50.
EURCHF remains above 0.9100 as the Swiss franc has lost its safe haven appeal, as the market weighs weaker gold prices, the ECB’s more hawkish stance on the potential to tighten policy and the SNB’s verbal defense against further CHF strengthening.
AUDUSD weakened broadly as risk sentiment and metals prices remain under pressure Monday, with AUDUSD dipping well below 0.7000 to 0.6966 and eyeing the lows since early February at 0.6944.
