The USD is strengthening as oil rallies 10%, equities face pressure, and bond yields climb. Markets are digesting Friday’s weak U.S. jobs report showing a 92,000 drop in payrolls and a rise in unemployment to 4.4%. Attention now turns to key inflation data this week, with the February CPI on Wednesday likely to be the main driver for Fed expectations. Explosion damages U.S. embassy in Oslo, with police investigating possible terrorism. Trump launches multinational coalition to combat drug cartels across the Americas.
News Headlines. Asian share markets plunged on Monday as soaring oil prices raised fears of higher inflation and interest rates. Israel stepped up attacks in Lebanon after striking an oil facility in Tehran, escalating the conflict with Iran. Mexico and the U.S. to start trade talks on March 16 ahead of a review of the USMCA agreement.
In currency markets. Asian currencies weakened on Monday as surging oil prices and escalating conflict in the Middle East drove investors toward the safe-haven U.S. dollar. Energy-importing economies came under pressure, with the South Korean won hitting a 17-year low. Asian currencies weakened against the U.S. dollar, with the Thai baht falling 0.90%, the Malaysian ringgit 0.67% and the Japanese yen 0.43%. Among the antipodeans, the Australian dollar slipped 0.20%, while the New Zealand dollar edged up 0.10%. Higher inflation concerns also pressured high-yielding currencies, with the South African rand down 1.45% and the Mexican peso losing 0.55%.
In commodity markets. Oil prices hit highs near $119 a barrel as supply cuts and Iran war fears rattled global markets – a 60% rise since the war began. Oil prices gave up part of their gains as governments moved to shield economies from the widening Iran war as oil prices surged after producers cut output. G7 finance ministers will discuss releasing emergency reserves, while countries like South Korea consider fuel price caps and Japan prepares for a possible crude release. While short-term movements draws attention, the monthly surge in energy markets has been dramatic: oil is up 62% over the past month, heating oil 70%, and UK natural gas has jumped 115%. With inflation concerns rising, gold fell 1.4% and silver dropped 1.3%. In agricultural markets, soybeans rose 1.4% and wheat gained 0.5%, while lumber slipped 1%.
USD/CAD remains under pressure as the Loonie benefits from the spike in oil prices.
EUR/CAD edged higher as surging oil prices and global risk aversion weighed on the Canadian dollar.
EUR/USD hovered around 1.1540 on Monday as escalating Middle East tensions dampened risk appetite, lifting the safe-haven U.S. dollar
GBP/EUR edged lower as the euro firmed following German data, while geopolitical tensions and rising energy costs kept markets on edge
GBP/USD slid toward $1.3350 as investors fled to the safe-haven dollar amid the widening conflict involving the U.S., Israel and Iran
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