Market drivers and catalysts
Equities: Equities fell across regions as Iran headlines lifted oil, revived inflation fears, and hit tech.
Volatility: Geopolitics, oil risk, VIX elevated
Digital Assets: Crypto softer, options expiry, ETF outflows
Fixed Income: A big spike in global yields Thursday on fresh oil price rises, with Japan’s JGB yields hitting new multi-decade highs.
Currencies: USD strength Thursday eased early Friday, Japan’s finance ministry weighs in against JPY weakness
Commodities: BCOM showing small weekly loss but large monthly gain; crude steadies near highs; gold rangebound but nervous
Macro events: Geopolitics, labour resilience, steady global growth, inflation risks, Fed cautious on oil-driven inflation
Macro headlines
Trump extended the deadline for US attacks on Iran’s energy infrastructure by 10 days claiming talks are going “very well”. Iran allowed 10 tankers through Hormuz and rejected the US plan, proposing its own terms, including control over Hormuz, while the Defense Department according to the WSJ is considering sending 10,000 more troops to the Middle East.
US initial jobless claims rose by 5,000 to 210,000 in mid-March, meeting expectations but below last year's average. Continuing claims fell by 32,000 to 1,819,000, below expectations, tying the lowest since May 2024. This contrasts with February's weak jobs report. Federal employee claims fell by 59 to 584.
Global GDP growth is forecast at 2.9% in 2026 and 3.0% in 2027, driven by tech investment and easing tariffs, despite Middle East conflict uncertainty. Inflation for G20 economies is revised to 4.0% in 2026, moderating to 2.7% in 2027. US growth will slow from 2.0% to 1.7%, with inflation peaking at 4.2%. China's growth will ease to 4.4% and 4.3%. The Eurozone will grow 0.8%, recovering to 1.2%, while Japan's growth remains at 0.9%.
Three Fed officials expressed growing anxiety over the US economic outlook due to the war in the Middle East, with one policymaker saying the spike in oil prices had shifted the balance of risks for now, leaving inflation as a bigger concern than employment. Meanwhile, Stephen Miran stated that reducing the financial system's liquidity demand could enable the central bank to significantly reduce its balance sheet and ease monetary policy.
Macro calendar highlights (times in GMT)
0800 – Spain flash Mar. CPI
1400 – US Mar. Final University of Michigan Sentiment
Earnings this week
Today: Carnival
Next week:
Tuesday: Nike
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 fell 1.7% to 6,477.16, the Dow dropped 1.0% to 45,960.11, and the Nasdaq Composite lost 2.4% to 21,408.08 as hopes for a quick diplomatic breakthrough faded after Iran rejected the U.S. ceasefire proposal. Brent settled above $108 a barrel, Treasury yields rose, and the market quickly remembered that high oil is rarely a love letter to growth. Nvidia fell 4.2%, AMD dropped 7.5%, and Intel lost 6.5% as chip stocks led the selloff, while Valero rose 5.8% as energy names followed crude higher. The next watchpoint is whether Trump’s 10-day extension cools oil, or just delays the next market headache.
Europe: Europe also moved lower. The STOXX 600 fell 1.1% to 580.84, the Euro STOXX 50 dropped 1.5% to 5,565.93, and the FTSE 100 lost 1.3% as rising energy prices and firmer bond yields revived worries about inflation and a more hawkish European Central Bank. Cyclicals took the hit: H&M fell 2.2% after soft March sales overshadowed its profit beat, Boliden sank 20.0% on mine disruption news, and Edenred dropped 17.2% after an Italian antitrust probe. The next test is simple enough, if not cheerful: can inflation data cool rate fears before oil does more damage.
Asia: Asia weakened on Thursday as oil fears and renewed pressure on chip names hit risk appetite. Japan’s Nikkei 225 slipped 0.3% to 53,603.65 and Hong Kong’s Hang Seng fell 1.9% to 24,856.43, while South Korea’s Kospi dropped about 3.0% as investors sold memory names and braced for the inflation hit from higher energy imports. Samsung fell 4.7% and SK Hynix lost 6.2% after Google’s memory-compression update rattled assumptions about future demand, while Alibaba dropped 4.6%, Meituan fell 3.7%, and Kuaishou sank 14.0% as Hong Kong tech gave back Wednesday’s relief and investors worried about softer growth and heavier AI spending. Friday’s early trade steadied after Trump extended his deadline by 10 days, but the region still looks headline-driven.
Volatility
Volatility continues to be driven primarily by geopolitics, oil, and inflation expectations rather than company-specific developments. The extension of the pause on potential strikes against Iranian energy infrastructure has helped stabilise sentiment slightly, but the underlying risk remains unresolved. Markets are still highly sensitive to any disruption around the Strait of Hormuz, given its importance for global oil supply, and any renewed escalation could quickly feed back into higher inflation expectations and delay rate cuts. The VIX closed at 27.44, remaining elevated and signalling that investors are still cautious despite the absence of panic.
From an options perspective, the market started the week pricing an S&P 500 move of roughly 178 points (2.74%) into today’s expiry; with only today remaining, the implied move has narrowed to about 80 points (1.2%). For today’s expiration, the options chain shows a slight upside skew, with near-the-money calls around the 6,475–6,480 area trading marginally richer than comparable puts, suggesting limited demand for immediate downside protection.
Digital Assets
Digital assets are softer again, reinforcing the view that crypto is still trading as a risk asset rather than a defensive one. Bitcoin is holding near $68,600, Ether around $2,060, while XRP and Solana remain under pressure, as broader risk appetite is weighed down by ongoing Iran uncertainty and macro-driven volatility. A key near-term catalyst is today’s large Bitcoin options expiry, which could increase short-term price swings as positions roll off and hedges are adjusted.
Institutional flows remain cautious. US spot Bitcoin ETFs recorded a $171 million net outflow on 26 March, including roughly $42 million from IBIT, while US spot Ether ETFs saw a $92 million net outflow, with ETHA accounting for a significant $140 million withdrawal, only partly offset by inflows into other products. This suggests that institutional demand remains selective, particularly for Ethereum exposure. Crypto-linked equities reflect this tone, with weakness in COIN, MSTR, RIOT, CLSK, and CIFR, while MARA stands out after announcing Bitcoin sales to reduce debt.
Fixed Income
US Treasury yields rose sharply Thursday as oil prices did likewise, taking the benchmark 2-year Treasury yield up a full ten basis points to 3.98%, the highest daily close for this cycle and since June of last year. At these levels, the market is leaning on the notion that the next Fed policy move would be a hike on inflation risks from spiking energy prices from the war in Iran. Still, the balance of the 2026 calendar year only has half of a rate hike priced in. The 10-year yield rose from Wednesday’s close of 4.33% to 4.42%, still just shy of the 4.44% high from earlier this week. at 4.36%. The more rapid move higher at the short end of the US treasury yield curve has seen the 2-10 flatten to below 45 basis points from the four-year higher near 73 basis points in early February.
Shorter-end Japanese government bond yields climbed to another multi-decade high, with the benchmark 2-year yield rising another 3 .5bps Friday to 1.386% by late trading hours In Tokyo, its highest level since 1996. The market is pricing great than 65% odds of a 25-bp rate hike at the late April BoJ meeting. Further out the curve, the benchmark 10-year JGB yield also eyed multi-decade highs as it jumped eight basis points to 2.36%, just above the cycle high from January.
European yields rocketed higher Thursday on aggravated inflation fears from elevated energy prices. The benchmark 2-year German Schatz yield rose over 11 basis points to close at 2.715%, the highest daily close since mid-2024. At the longer end of the curve, the benchmark 10-year German Bund posted its highest daily close since 2011 at just above 3.07%.
Commodities
The Bloomberg Commodity Index is heading for a small weekly decline, with losses in energy and precious metals partly offset by gains in industrial metals and across the agriculture sector. Despite this setback, the index remains on track for a monthly gain of around 10%. Brent crude is heading for a record monthly advance as the global supply outlook continues to tighten, currently up 44%, while refined products such as diesel are up more than 60%. Overall, the index - tracking a basket of 26 major commodity futures - is up 31% year-on-year, continuing to outperform other asset classes by a considerable margin.
Oil markets continue to react to the shifting tone in Trump’s war rhetoric, with prices stabilising in early Friday trading after surging to near USD 110 on Thursday. Trump extended Iran talks deadline after US stocks posted the worst day since the crisis began, while Tehran has allowed a limited number of tankers to transit the Strait of Hormuz. Still the reduced flow of around 8 million barrels a day continues to critically tighten the global supply outlook. An estimated 1,000 vessels - primarily oil, fuel, and LNG carriers - are currently stranded in the Gulf, unwilling to transit due to elevated security risks and the withdrawal of war-risk insurance coverage.
Gold and silver continue to trade in line with broader risk assets, currently driven by movements in energy prices due to their impact on growth, inflation, and rate expectations. Investors appear reluctant to re-engage with the longer-term hard asset narrative until this correlation begins to break. This week, gold found support at its 200-day moving average, last at USD 4,113, with resistance found near USD 4,600. ETF outflows persisted, though at a slower pace, bringing total net selling this month to 85 tonnes, equivalent to a 2.7% reduction in holdings.
Currencies
The US dollar strengthened to new highs for the week on Thursday, but eased off that strength in the Friday session in Asia, perhaps as oil prices eased slightly and as Japan’s Ministry of Finance weighed in against further JPY weakness, threatening “bold actions” on further JPY weakness after USDJPY once again approached the 160.00 level late Thursday (posting a high of 159.85 before retreating back below 159.60). EURUSD hit a low Thursday of 1.1520 before rebounding close to 1.1550.
AUDUSD fell as low as 0.6872 into early Friday hours, its lowest level since late January, before rebounding back above 0.6900.
