Market Wrap 2026-03-11

Market Wrap 2026-03-11

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Today's US Market Wrap — Key Points

• Stocks mixed amid rising oil, Iran concerns.
• Treasury yields rise on oil, inflation data.
• Dollar strengthens; Euro eyes rate hike timing.
• Oil jumps on Strait of Hormuz worries, IEA plan.
• Focus shifts to US jobless claims, oil prices.

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MARKET SNAPSHOT

• Equities: Flat/Down
• Treasuries: Down
• Crude: Up
• Dollar: Up
• Gold: Down

MARKET RECAP

• IEA members have agreed to release 400 million barrels of oil.
• US CPI met expectations in February, but PCE components were elevated.
• The FBI reportedly warned California police departments about potential Iranian retaliation for American attacks.
• US Interior Secretary Burgum anticipates US oil companies will announce increased production in response to price signals.
• A US 10-year Treasury auction showed improvement compared to recent auctions but remained weak relative to averages.
• ECB's Kazimir suggested a rate hike related to Iran might be closer than previously anticipated.
• The US is expected to announce new Section 301 trade probes on Wednesday.
• ORCL (Oracle) earnings surpassed expectations.

UPCOMING ECONOMIC DATA AND EVENTS

• Data: Swedish CPIF Final (Feb), Canadian Trade Balance (Jan), US Trade Balance (Jan), Initial Jobless Claims, Housing Starts, Atlanta Fed GDP.
• Events: IEA OMR, CBRT Policy Announcement.
• Speakers: BoE's Bailey; Fed's Bowman.
• Supply: Italy, UK, US.
• Earnings: Adobe.

MARKET WRAP

On Wednesday, stock prices were mostly unchanged or slightly lower, as rising oil prices tempered any potential recovery from Tuesday's late sell-off. The IEA confirmed a plan to release 400 million barrels of oil into the market, but the timing will vary by country. Uncertainty persists regarding the Strait of Hormuz, where efforts to encourage shippers to resume sailing are facing resistance due to safety concerns and reports of mine placement. Reports suggesting Iran's potential drone attacks on California in response to the war briefly dampened sentiment and pushed oil prices higher. The increase in crude oil prices led to higher yields across the curve, potentially influenced by dealer positioning ahead of the 10-year Treasury auction, which followed a weak 3-year supply on Tuesday. The US CPI data aligned with expectations, but the PCE components indicated stronger inflationary pressures, contributing to downward pressure on Treasuries. In foreign exchange markets, the Dollar gained strength as yields increased, while the Euro was in focus following ECB's Kazimir's suggestion of a possible rate hike sooner than expected, though not at the next meeting. The Australian Dollar outperformed due to increased expectations of a more hawkish stance from the RBA, with Westpac now forecasting an RBA rate hike in March. Gold prices experienced a slight decline, while silver underperformed, and Bitcoin rose back above USD 70,000.

US

US CPI (FEB):

• Headline inflation rose 0.267% M/M, matching the 0.3% consensus and increasing from the previous 0.171%. The annual rate remained at 2.4% Y/Y, aligning with expectations.
• Core inflation increased by 0.216% M/M, in line with the 0.2% forecast, but cooler than the prior 0.295%. The annual rate rose by 2.5% Y/Y, matching expectations and the previous reading.
• Core goods prices saw little change (0.08% vs 0.04%), while core services cooled to 0.27% M/M from 0.39%, a positive sign for Fed officials concerned about this area of pricing.
• Super core inflation rose to 2.74% Y/Y from 2.67%.
• The data indicates that inflation remains sticky around current levels, although analysts anticipate potential upside risks due to the Middle East conflict, rising oil prices, and potential supply chain disruptions at the Strait of Hormuz.
• A WSJ Fed watcher noted that favorable data imputation in the October report, due to the government shutdown, will unwind after March.
• Pantheon Macroeconomics observed that CPI components feeding into the core PCE deflator were elevated and anticipates core PCE inflation at 0.4% M/M in February, following a 0.4% increase in January (January PCE data is due Friday).
• Overall, the report is unlikely to alter the Fed's current stance, as policymakers prefer to assess the impact of the Middle East conflict and tend to disregard temporary energy price increases.
• Pantheon noted that "the Fed's rules of thumb imply that the 30% increase in oil prices since February will lift the core CPI by just 0.15ppts".

FIXED INCOME

T-NOTE FUTURES (M6) SETTLED 15 TICKS LOWER AT 111-31+

Yields increased across the curve, influenced by rising oil prices, potential dealer concession activity, and elevated PCE components within the CPI report. At settlement: - 2-year: +4.4bps at 3.636% - 3-year: +4.1bps at 3.654% - 5-year: +4.2bps at 3.782% - 7-year: +4.6bps at 3.982% - 10-year: +5.4bps at 4.210% - 20-year: +7.1bps at 4.824% - 30-year: +6.7bps at 4.854%

THE DAY:

T-notes experienced declines across the curve, with a bear steepening trend and yields rising by 6-9bps. Rising oil prices continued to fuel inflation concerns. Despite the IEA's confirmation of a 400 million barrel oil release, prices remained elevated. This was seemingly a "sell the rumour, buy the news" play, given the large weakness on Tuesday was due to building expectations of this outcome. In addition to oil market activity, there was potential dealer concession activity ahead of the 10-year auction, following a weak 3-year offering on Tuesday. The 10-year auction showed better demand than the 3-year, but it was not as strong as recent averages. US data also influenced UST price action, with analysts pointing to elevated PCE components in the CPI report, even though the overall report largely met expectations. Corporate issuance continued, with Salesforce (CRM) confirming its 8-part Dollar issuance (USD 25 billion), and seven companies seeking to sell debt today. Attention on Thursday will focus on the 30-year bond auction and US Jobless Claims data, while geopolitical developments and crude oil price movements remain key factors.

SUPPLY

Notes

The US sold USD 39 billion of 10-year notes at a high yield of 4.217%, higher than the previous 4.177%, tailing the when-issued rate by 0.7bps. This was an improvement from the prior 1.4bps tail but not as strong as the six-auction average of 0.3bps. The bid-to-cover ratio increased to 2.45x from 2.39x, but remained below the 2.48x average. The breakdown revealed a notable increase in indirect demand to 74.5% from 64.5%, above the 69.3% average. Direct demand, similar to the 3-year on Tuesday, saw a notable drop to 12.8% from 22.1%, below the 20.3% six-auction average. Dealers were left with an above-average take-down of 12.7%, but lower than the prior 13.4%. Overall, this was an improvement from the prior 10-year auction and stronger than the 3-year auction on Tuesday, but not as strong as the average 10-year auction. The US will sell USD 22 billion of 30-year bonds on March 12th, with settlement on March 16th.

Bills

• The US sold 17-week bills at a high rate of 3.600%, with a bid-to-cover ratio of 3.19x.

STIRS/OPERATIONS

• Fed Rate Cut Pricing: March 0bps (previous 0bps), April 1.7bps (previous 1.7bps), June 7.5bps (previous 9.8bps), December 30.6bps (previous 39bps).
• NY Fed RRP operation demand was at 0.55 billion (previous 0.28 billion) across 4 counterparties (previous 4) on March 11th.
• SOFR was at 3.64% (previous 3.65%), with volumes at USD 3.2 trillion (previous USD 3.173 trillion) on March 10th.
• EFFR was at 3.64% (previous 3.64%), with volumes at USD 104 billion (previous USD 99 billion) on March 10th.

CRUDE

WTI (J6) SETTLED USD 3.80 HIGHER AT 87.25/BBL; BRENT (K6) SETTLED USD 4.18 HIGHER AT USD 91.98/BBL

Crude oil prices increased, influenced by concerns about mines in the Strait of Hormuz and the IEA's recommendation. During the European morning, price action was driven by updates from the UKMTO, which reported three incidents, pushing WTI and Brent to intraday highs. Subsequently, benchmarks pared gains as participants awaited details from the IEA's recommendation, which largely aligned with expectations. IEA members agreed to release 400 million barrels, although details regarding the release are limited, with Birol stating more information will be provided "in due course" and the timeframe will be appropriate for each member country. As the IEA concluded its press conference, and alongside an Axios piece, oil prices rose again, supporting the close and settling just below session peaks. The Axios article cited a Trump phone call, where he reiterated that the war will end "soon" because there is "practically nothing left to target." However, bullish sentiment for oil potentially increased as Axios added that officials are preparing for at least two more weeks of strikes. Mines in the Strait of Hormuz remain a focus, with Trump suggesting Iran has not laid any, while separate reports indicate Iran has laid a dozen (or a few dozen) so far. The JMIC stated they cannot confirm whether there are mines present. Crude oil also saw a leg higher on reports in ABC that the FBI had intel that Iran aspired to attack California with drones in response to the war. WTI traded between USD 81.79-88.99/bbl and Brent between USD 86.24-93.15/bbl.

EQUITIES

CLOSES: - SPX: -0.08% at 6,776 - NDX: +0.03% at 49,965 - DJI: -0.61% at 47,417 - RUT: -0.20% at 2,543

SECTORS: - Consumer Staples: -1.29% - Real Estate: -1.12% - Financials: -0.83% - Utilities: -0.81% - Materials: -0.33% - Industrials: -0.27% - Consumer Discretionary: -0.27% - Health: -0.20% - Communication Services: +0.01% - Technology: +0.35% - Energy: +2.48%

EUROPEAN CLOSES: - Euro Stoxx 50: -0.70% at 5,796 - Dax 40: -1.59% at 23,588 - FTSE 100: -0.56% at 10,354 - CAC 40: -0.19% at 8,042 - FTSE MIB: -0.95% at 44,773 - IBEX 35: -0.53% at 17,352 - PSI: +0.58% at 9,076 - SMI: -0.61% at 12,976 - AEX: +0.05% at 1,003

EARNINGS:

STOCK SPECIFICS:

• Oracle (ORCL): Reported EPS, revenue, and cloud revenue beats, along with strong next quarter profit guidance and raised FY top line outlook.
• UniFirst (UNF) is to be acquired by Cintas (CTAS) for $310 per share in cash and stock; UNF closed Tuesday at 257.91.
• AeroVironment (AVAV): Profit and revenue were below expectations.
• Nvidia (NVDA) narrowed its CoWoP PCB partners to three amid tightening advanced packaging capacity.
• Texas Instruments (TXN) is reportedly preparing to raise prices on a range of semiconductor products from April 2026.
• JPMorgan (JPM) has marked down certain loans held by private credit groups and is tightening lending to the sector.
• Wolfe Research raised Micron (MU) price target to $500 and reiterated an ‘Outperform’ rating.
• Campbell's (CPB): Top and bottom line missed expectations, and the FY outlook was cut.
• Uber (UBER) is partnering with Amazon's (AMZN) Zoox to offer Robotaxi rides.
• Nvidia (NVDA) will invest USD 2 billion in Nebius (NBIS), partnering to scale full-stack AI cloud. SLB (SLB) cut its Q1 outlook due to the Middle East conflict.
• Stryker (SYK) is the subject of a cyber attack, according to the WSJ, and the incident may be linked to Iran.
• Papa John's (PZZA) reportedly received a takeover bid from Irth Capital, reportedly offering USD 47 per share, according to the WSJ.
• Intel's (INTC) 10% stake sale to the US must be voided, according to a lawsuit.

FX

The Dollar strengthened against most major currencies as the constrained Strait of Hormuz continues to be a concern with no resolution in sight. The IEA announced that members agreed to an emergency release of 400 million barrels of oil stockpiles, matching the high end of the 300-400 million range provided in recent reports. However, with views growing that the conflict will be longer than originally thought, the IEA's move is being seen as having a short-lived effect. US yields tracked the move higher in oil prices, which have stayed firm despite the IEA announcement and more remarks from Trump aimed at easing concerns, resulting in the dollar being supported. Money markets pushed back pricing for Fed rate cuts, with the first cut not fully priced until December. Separately, US data did little to change market views, as both headline and core matched expectations, leaving all attention now on the Middle East's conflict impact on consumer prices.

EUR

The Euro was in focus after ECB's Kazimir suggested that a rate hike in response to Iran may be closer than thought. Initial modest upside was seen after the remark, but dissipated after he added that there is no reason to move rates at the next meeting. ECB’s Villeroy also said he does not expect a rate hike at next week's meeting.

AUD

The Australian Dollar was the only G10 currency to strengthen against the dollar as more banks upped hawkish RBA bets. The latest were Westpac and the National Australia Bank, who now expect the RBA to hike rates in March and May, respectively. BofA also sees a hike at next week's meeting. AUD/USD set a peak at 0.7188 before retreating to ~0.7146.