Market Wrap 2026-03-05

Core-Brief

05 Mar 2026 — 13 min read

According to Sky News Arabia, Iran's Deputy Foreign Minister stated that Iran has not communicated with the US to resolve the conflict, focusing instead on self-defense.
The Deputy Commander of the Iranian Army Central Command indicated that Iran has not closed the Strait of Hormuz; however, the IRGC reported striking a US oil tanker and announced that US, Israeli, and European vessels are prohibited from passing through the strait.
European stock markets are trading with mixed results; STMicroelectronics is rising due to a new chip release, while US equity futures are declining despite favorable earnings from AVGO.
The DXY is strengthening, while the Australian and New Zealand dollars are weakening due to China's new growth target and lower metals prices.
Fixed income benchmarks are decreasing as energy prices continue to influence market activity.
Crude oil benchmarks are increasing; spot gold is slightly up, while base metals are down following China's GDP forecast, which is the lowest since 1991.
Upcoming events include US Challenger Job Cuts (Feb), US Export/Import Prices (Jan), Jobless Claims, South Korean CPI (Feb), ECB Minutes (Feb), speeches from ECB President Lagarde and Fed's Bowman, and earnings reports from Marvell, Costco, Kroger, and Victoria's Secret.

EUROPEAN TRADE

EQUITIES

European stock markets (STOXX 600 +0.4%) are showing mixed performance, with the IBEX 35 (+1.0%) leading gains and the SMI (-0.2%) slightly lagging, influenced by Kuehne+Nagel (-1.9%).
Most European sectors are trending positively, with Utilities (+1.1%) performing best and Basic Resources (-0.6%) declining despite metal price increases. Technology (+0.8%) is benefiting from STMicroelectronics (+5.6%) announcing a new generation of MCUs designed to enhance the performance of small smart devices while meeting strict cost, size, and power requirements.
US equity futures (NQ/ES -0.1%, RTY -0.4%) are slightly down. Broadcom (+7.0% pre-market) reported better-than-expected quarterly earnings and revenue, along with strong revenue guidance driven by high demand for AI chips.
Foxconn (2317 TT) reported February revenue of TWD 596.8 billion, an 8.1% year-over-year increase (previous month: TWD 730 billion, a 36% year-over-year increase), noting that Q1 visibility aligns with market expectations.
JD.Com (JD) reported Q4 2025 EPS of USD 0.08 (expected: USD 0.07) and revenue of USD 50.4 billion (expected: USD 50.7 billion), and announced an annual dividend of USD 0.50 per ordinary share or USD 1 per ADS.
Broadcom Inc. (AVGO) reported Q1 2026 adjusted EPS of USD 2.05 (expected: USD 2.02) and revenue of USD 19.3 billion (expected: USD 19.22 billion), and announced a USD 10 billion share buyback program.
NVIDIA (NVDA) is reportedly reallocating TSMC (2330 TT) capacity due to export controls stalling sales in China, shifting output from H200s intended for the Chinese market to Vera Rubin products, according to the Financial Times.

FX

The DXY is mildly firmer, trading between 98.66 and 99.20, following some pressure in the prior session as investors favored risk assets. Haven inflows have resumed given the overall environment has not changed – the Gulf remains at war, and the Strait of Hormuz remains effectively shut, and there are currently little signs of easing. Sky News Arabia reported that the Iranian Deputy Foreign Minister suggested that Iran “is prepared to abandon its nuclear program” if the US presents a rewarding alternative offer. This spurred risk-on trade, with the index falling from 99.08 to 98.75 over the course of around 15 minutes. Later Iranian press reported that Iran was prepared to get rid of its uranium stockpiles, in exchange for “something good” – though this proposal was made pre-war.
EUR and GBP are pressured, as focus remains firmly on geopolitics and the inflationary/growth impacts of the net-importers. The pairs are off worst levels, following the aforementioned commentary via the Iranian Deputy Foreign Minister. There have been a few ECB speakers today, notably de Guindos suggesting that the ECB could change policy stance if inflation expectations change as a result of the war. For the GBP , ING points out the outperformance in the GBP against the EUR – the bank suggests that asset managers are unwinding previously held long EUR trades; moreover, markets have been pushing back calls for near-term cuts.
JPY is mildly lower, with USD/JPY currently trading within a 156.44 to 157.35 range. Some modest strength in the JPY was seen on Bloomberg reports that officials see little chance of a rate hike in March, but will not rule one out in April.
Antipodeans underperform this morning, pressured by the downside across the metals complex and in the aftermath of mixed Australian trade data – a factor which has resulted in the Aussie lagging. Moreover, China set its 2026 GDP growth target at between 4.5-5% (as expected), nonetheless, the lowest since 1991, as Beijing seeks flexibility to manage economic challenges including weak consumption, a property-sector crisis, slowing population growth and global trade tensions.

FIXED INCOME

Fixed income markets are starting bearishly, with energy dynamics influencing price action.
USTs and Bunds are lower by 11 and over 50 ticks, respectively. The Middle East conflict is increasing yields and weighing on benchmarks. USTs are down to a low of 112-15+, establishing a new week-to-date base. If the trend continues, support levels at 112-06, 112-04, 111-31, 111-26, and 111-13+ will be monitored.
For the US, the focus is on geopolitical updates, particularly regarding Iran's uranium stockpiles. The day includes weekly jobless claims, Challenger job cuts, and Revelio and Chicago Fed statistics. Export/import prices will be released, which are relevant to PCE. Fed's Bowman (a voter) is scheduled to speak, with a Q&A session expected.
In Europe, the situation is similar. The ECB Minutes are the main event, although they may be outdated due to recent developments. There was no significant reaction to supply from France or Spain. Bunds are at a trough of 127.67, approaching the week-to-date base of 127.50.
Gilts experienced another morning of catch-up trade, but with a bearish bias due to peer performance and energy price movements. There was no reaction to the latest DMP, which is now somewhat stale. Gilts are currently around 20 ticks off a low of 91.46, but still down over 40 ticks for the day.
The EU is reportedly considering joint defense bonds amid concerns about the Iran war, according to Welt; a proposal is expected to be presented, with the bonds potentially backed by member states.
The UK sold GBP 3.5 billion of 4.00% 2029 Gilts, with a bid-to-cover ratio of 3.49x (previous: 3.66x), an average yield of 3.810% (previous: 3.821%), and a tail of 0.4bps (previous: 0.3bps).
France sold EUR 13.449 billion (versus an expected EUR 11.5-13.5 billion) of 3.50% 2035, 1.25% 2036, 2.50% 2043, and 4.10% 2046 OATs.
Spain sold EUR 5.34 billion (versus an expected EUR 4.5-5.5 billion) of 2.35% 2029, 3.00% 2033, and 3.50% 2041 Bonos, and EUR 0.592 billion (versus an expected EUR 0.25-0.75 billion) of 1.15% 2036 ILs.
Japan sold JPY 530 billion of 30-year JGBs, with a bid-to-cover ratio of 3.66x (previous: 3.64x) and an average yield of 3.398% (previous: 3.615%).

COMMODITIES

Crude oil benchmarks remain supported by the ongoing geopolitical conflict in the Middle East, despite some pressure during the early European session. WTI and Brent are trading at the upper ranges of USD 74.97-78.09 and USD 81.50-84.74 per barrel, respectively. The crude complex faced some pressure during the early European session. Brent saw some pressure following news that the Deputy Commander of the Iranian Army Central Command said Iran has not closed the Strait of Hormuz and is currently handling ships passing through the Strait in accordance with relevant international rules and existing agreements , CCTV reported. Further pressure was seen, following comments from the Iranian Deputy Foreign Minister that Iran is ready to abandon its nuclear program on the condition that the US presents a rewarding alternative offer, Sky News Arabia reports; adds no message was sent to the US to end the conflict.
Spot gold initially increased but then stalled near USD 5,200 per ounce. Price action was relatively subdued compared to recent movements, with little reaction to news that Venezuela's Minerven signed a multimillion-dollar deal with Trafigura to sell up to 1,000 kilos of gold destined for US markets. XAU and XAG are trading in the upper end of USD 5120.82-5158.77/oz and USD 80.523-85.545/oz, ranges respectively.
Base metals are trading slightly lower, with 3M LME copper trading in the lower range of USD 12.87-12.96k per tonne. Sentiment for copper has been affected by China, its largest market, setting its lowest GDP growth target since 1991. Elsewhere, JPMorgan suggested that aluminium prices could quickly rise toward USD 4,000 per metric ton if increased headlines indicate significant disruptions to Middle East supply.
Saudi Aramco is diverting more of its crude exports to the Red Sea port to bypass the Strait of Hormuz, according to WSJ sources.
China's state iron ore buyer reportedly summoned traders on BHP (BHP AT) restrictions following months of long standoff talks between CMRG and BHP over long term contracts on China's mills, Bloomberg reported.
The EU is reportedly considering aid to fix Ukraine's oil plant at the center of its loan delay, according to sources.
The Deputy Commander of the Iranian Army Central Command stated that Iran has not closed the Strait of Hormuz and is currently handling ships passing through the Strait in accordance with relevant international rules and existing agreements, according to CCTV.
The Iranian Revolutionary Guard reported hitting a US oil tanker earlier this morning, according to SNN; the tanker was hit in the North Persian Gulf and is now burning; US, Israeli, and European vessels are not allowed in the Strait of Hormuz.
India's MRPL has reportedly shut a crude unit and some secondary units at its 300k BPD refinery due to crude shortages.
India is reportedly in talks with the US for ship insurance and with the IEA and OPEC regarding the crude oil supply situation, according to sources.
Petronet (PLNG IS) reportedly issued force majeure.
Kpler data indicates 10 million barrels of crude loading from Al-Muajjiz (Saudi) between March 1st and 4th, which, if sustained, would be a record pace, according to Kpler's Bakr. Additionally, at least three VLCCs in the Red Sea are signaling to Yanbu, with more heading there.
China's government is urging companies to suspend signing new contracts to export refined fuel.
Trump officials reportedly brokered a large US-Venezuela gold deal, with the Venezuela state gold miner inking a multi-million dollar deal on Monday to sell up to 1,000 kilos of gold destined for US markets to Trafigura, according to Axios sources.

NOTABLE EUROPEAN DATA RECAP

EU Retail Sales YoY (Jan) Y/Y 2.0% vs. Exp. 1.7% (Prev. 1.8%, Rev. From 1.3%, Low. 1.4%, High. 2.1%)
EU Retail Sales MoM (Jan) M/M -0.1% vs. Exp. 0.3% (Prev. 0.2%, Rev. From -0.5%, Low. -0.1%, High. 0.6%)
UK S&P Global Construction PMI (Feb) 44.5 vs. Exp. 47 (Prev. 46.4).
Italian Retail Sales YoY (Jan) Y/Y 2.3% (Prev. 0.9%).
Italian Retail Sales MoM (Jan) M/M -0.8% vs. Exp. 0.2% (Prev. -0.8%).
French Industrial Production MoM (Jan) M/M 0.5% vs. Exp. 0.5% (Prev. 0.5%, Rev. From -0.7%, Low. 0.2%, High. 1.0%).
Spanish Industrial Production YoY (Jan) Y/Y 0.3% vs. Exp. 1.7% (Prev. -0.3%).
Swedish CPIF MoM Prel (Feb) M/M 0.6% vs. Exp. 0.8% (Prev. 0.3%).
Swedish CPIF YoY Prel (Feb) Y/Y 1.7% vs. Exp. 1.8% (Prev. 2.0%).
Swedish Inflation Rate MoM Prel (Feb) M/M 0.6% vs. Exp. 0.8% (Prev. 0.1%).
Swedish Inflation Rate YoY Prel (Feb) Y/Y 0.5% vs. Exp. 0.6% (Prev. 0.5%).
Swiss Unemployment Rate (Feb) 3.2% (Prev. 3.2%, Low. 2.9%, High. 3.0%).

CENTRAL BANKS

Bank of Japan officials see little chance of a rate hike this month but still on track to raise interest rates, with the possibility of April not ruled out, according to sources cited by Bloomberg.
ECB's Nagel says it is too soon to draw any monetary policy conclusion from the volatile Iran situation.
ECB's Rehn said it is likely to raise inflation in the short-term; this kind of conflict tends to dampen demand and leads to more subdued growth.
ECB's de Guindos said outlook for Europe is shaped by war in Iran, balance of risks was two-sided before the war. Baseline scenario is that it will be a short conflict, with other scenario being that of a more protracted one. ECB could change policy stance if inflation expectations change as a result of the war. Will look out for any steady modification of inflation and inflation expectations.
ECB's Villeroy does not see a reason today why the ECB should raise interest rates.
ECB's Villeroy said the ECB are following energy prices and markets very closely; financial stability is not at risk.
BoE DMP (Feb): 1yr ahead CPI expectation 3.00% (prev. 3.10%), 3yr ahead CPI expectation 2.8% (prev. 2.9%).
BoE is to scenario plan the potential economic and financial impact of an AI shock amid concerns of jobs cuts, according to Bloomberg.
CNB's Prochazka tells Ekonom that he sees potential for 25bps rate cut to 3.25%, said the CNB may cut rates once more this year. NOTE: The interview was conducted prior to the Middle East conflict this week.
Morgan Stanley expects the ECB to keep interest rates steady in 2026 vs the prior forecast of two 25 bps cuts each in June and September; Morgan Stanley expects the ECB to resume rate cuts in 2027 with two 25 bp cuts each in June and September.

NOTABLE US HEADLINES

US Treasury Secretary Bessent reportedly informed House Republicans that they should “take the lead” to “pass our own housing affordability” legislation, in order to prevent Democrats from controlling the issue, Semafor reports citing sources
Judge orders Trump admin to finalise goods entering US without assessing tariffs that were struck down by the SCOTUS; order could impact millions of shipments.
US Senate Republicans await the endorsement of President Trump in the Texas Republican Senate runoff between Cornyn and Paxton, Politico reported; billed as a choice between an established Republican candidate, and a MAGA firebrand.
BofA card spending, week to Feb 28th: +1.8% (prev. 4.4% W/W), slowdown driven by the Northeast is which spending fell sharply due to the second snowstorm.

GEOPOLITICS

MIDDLE EAST

Iran was prepared to get rid of uranium stockpiles in US talks for something good in exchange, according to Iranian press.
Iran's Deputy Foreign Minister said Iran is ready to abandon its nuclear program on the condition that the US presents a rewarding alternative offer, Sky News Arabia reported; adds no message was sent to the US to end the conflict. Focused on self defence efforts.
Iran's ambassador to India said Tehran is not ready for negotiations with the US and Israel, while Iran does not want war but has the capability to respond.
Deputy Commander of the Iranian Army Central Command said Iran has not closed the Strait of Hormuz; Iran is currently handling ships passing through the Strait in accordance with relevant international rules and existing agreements, CCTV reported.
Iranians have been sending messages to the Trump admin in recent days through Gulf states and other countries in the region, Axios reported, citing US sources; but the US has not responded, "We treated those messages as bullshit".
Iranian military denies firing any missiles at Turkey and affirms respect for its sovereignty.
Iranian media report that Iran has bombed Kurdish headquarters in Sulaymaniyah, Iraq, according to Al Arabiya.
Iranian semi official SNN reported Iran missiles hit Tel Aviv and that Israeli air defences failed.
US officials have discussed sending special operations teams into Iran to target senior Iranian Revolutionary Guard Corps (IRGC) officials and people familiar with Iran's nuclear programme, Middle East Eye reported overnight citing a Gulf official.
Israel announced it is conducting a fresh widespread wave of strikes in Tehran; subsequently, blasts reported in Tehran and Karaj.
Sirens sound in Tel Aviv after an Iranian missile attack, while Sky News Arabia reported rockets were intercepted in the sky of Tel Aviv.
Explosions heard in Jerusalem following warning about rocket fire from Iran, while Lebanese media reported two Israeli raids on the town of Tol in southern Lebanon.
Israel Home Front gives all clear for central region, while sirens sound in Kiryat Shmona, according to N12.
IDF said rockets were fired from Iran towards Israel and defense systems are intercepting the threat.
Israel conducts a second raid on the southern suburbs of Beirut, according to Sky News Arabia.
Sirens sound in Upper Galilee, Northern Israel, amid fears of drone infiltration, according to Sky News Arabia.
Iraqi Kurdish sources deny involvement in the Iran war and said the Kurdistan region won't be a part of the war with Iran, according to ISNA.
Iran's strikes will intensify and expand in the coming days, according to Nour News, citing a statement by the IRGC.
US bases in Doha, Qatar, have been attacked, Iranian media reported.
Explosions heard in Doha, Qatar, Sky News Arabia reported citing AFP.
US Central Command has asked the Pentagon to send intelligence officers to its headquarters in Florida to support the war for at least 100 days.
US Senate blocks efforts to force Trump to end Iran's strikes without Congress approval; final vote count at 53-47.

RUSSIA-UKRAINE

Russia's Kremlin said there's no sign that Europe has changed its position on the Nord Stream, but that the EU is thinking of delaying imposing ban on LNG imports from Russia.
Russian Foreign Minister Lavrov said they are ready for further Ukraine talks, but have not yet seen the Western security guarantees and as such cannot approve them.
Russian Ambassador Alipov said they are always open to oil supplies to India.

CRYPTO

Bitcoin is fluctuating around USD 72,500, while Ethereum is holding above USD 2,100.

APAC TRADE

APAC stocks rebounded from yesterday's sell-off as the region took impetus from the positive handover from Wall Street, where the Nasdaq led the advances on tech strength, while geopolitics remained in focus.
ASX 200 was led higher by tech strength, but with gains capped by losses in the commodity-related sectors and after mixed trade data, which showed a contraction in monthly exports.
Nikkei 225 surged at the open but is off today's best levels after giving back the 56,000 status and with some headwinds from a stronger currency and firmer yields.
KOSPI firmly rebounded from the prior day's drastic sell-off and surged by over 11% in the first few minutes of trade.
Hang Seng and Shanghai Comp followed suit to the gains in regional peers, but with gains initially contained in the mainland as the attention was on the Government Work Report, in which China set the 2026 GDP target at between 4.5%-5.0%, its slowest growth target on record since 1991.

NOTABLE ASIA-PAC HEADLINES

China targets 2026 GDP growth at 4.5%-5.0%, as expected, while it sees 2026 CPI at around 2%. To add, China is to issue CNY 800bln yuan of new policy financing tools.
Chinese Premier Li Qiang said solid progress in modernisation and successful conclusion of the 14th Five-Year Plan, while China aims to boost consumption in its 15th Five-Year Plan.
South Korea President Lee said need to counter volatility increase in financial markets and need to pay attention to energy prices and supply, reiterates KRW 100tln program is on standby to stabilise markets.

NOTABLE APAC DATA RECAP

Australian Balance of Trade (Jan) 2.631B vs. Exp. 3.9B (Prev. 3.373B).
Australian Imports MoM (Jan) M/M 0.8% (Prev. -0.8%).
Australian Exports MoM (Jan) M/M -0.9% (Prev. 1%).
Japanese Stock Investment by Foreigners (Feb/28) 973.9 (Prev. 399.7, Rev. From 402).
Japanese Foreign Bond Investment (Feb/28) -673.1 (Prev. -1900.8, Rev. From -1898.8).