Market Wrap 2026-03-16

Market Wrap 2026-03-16

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Today's US Market Wrap — Key Points

• Equities up, crude down amid Middle East tensions and US/Iran communication.
• Central bank meetings (Fed, BoJ, BoE, ECB, RBA, SNB) in focus this week.
• US Dollar weakens; risk appetite boosts other currencies.
• Positive US/China trade talks; Nvidia forecasts $1T demand by 2027.

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MARKET SNAPSHOT

• Equities: Up
• Treasuries: Up
• Crude Oil: Down
• US Dollar: Down
• Gold: Flat

REAR VIEW

• President Trump stated that Iran desires a deal, is communicating with US representatives, and that the war will soon conclude.
• Trump is reportedly considering forming a coalition for the Strait of Hormuz and potentially seizing Iran's oil depot on Kharg Island.
• Loadings have reportedly resumed at Fujairah port in the UAE after being impacted.
• Iraq announced the issuance of tenders for oil exports via ports in Syria and Jordan.
• Bessent described US-China trade discussions in Paris as "very good."
• Canada's headline year-over-year inflation figure printed below 2%.
• The UK is reportedly planning to increase steel tariffs to 50% as part of a new strategy.
• US and Iranian representatives have reportedly been in contact recently.
• NVDA projects USD 1 trillion in demand through 2027.

COMING UP

• Data releases: Italian HICP Final (Feb), German/EZ ZEW Economic Sentiment Index (Mar), US ADP Employment Weekly, Japanese Trade Balance (Feb).
• Event: RBA Policy Announcement.
• Speakers: RBA's Bullock; ECB's Nagel.
• Supply: Japan, UK, US.

WEEK AHEAD

• Key events include meetings of the FOMC, BoJ, BoE, ECB, RBA, and SNB.

WEEKLY US EARNINGS ESTIMATES

MARKET WRAP

Equities experienced gains on Monday, while crude oil prices declined. The US conducted a strike on Kharg Island over the weekend, avoiding oil infrastructure. President Trump reiterated his belief that the war could end soon, suggesting ongoing communication between Iran and the US. Reports later indicated that Iran's Foreign Minister had been texting US Special Envoy Witkoff regarding ending the war, contributing to lower oil prices. The decline in oil prices supported T-notes across the yield curve, further bolstered by commentary from Goldman Sachs, which noted increasing downside risks for yields. In foreign exchange markets, risk appetite prevailed, with the US Dollar underperforming and cyclical currencies outperforming. Attention is now focused on a series of central bank meetings this week, including the Fed, BoJ, RBA, BoE, ECB, and SNB. US/China trade talks were reportedly positive, but uncertainty surrounds Trump's potential visit to China due to the Iran conflict, which could lead to a delay. Nvidia (NVDA) CEO delivered a keynote speech at the GTC, with NVDA shares closing higher but below earlier highs. A highlight was Huang's forecast of USD 1 trillion in demand through 2027 (compared to USD 500 billion from 2025 to 2026), initially boosting the stock before it pared gains.

US

NY FED:

• Business activity in New York State showed little change in March.
• The general business conditions index decreased by seven points to -0.2.
• New orders saw a modest increase, while shipments declined.
• Unfilled orders increased, delivery times lengthened, and supply availability slightly worsened.
• Inventories increased.
• Employment rose modestly, and the average workweek edged up.
• The pace of input price increases declined significantly but remained elevated, while the pace of selling price increases was little changed.
• Firms remained optimistic about future conditions, and capital spending plans strengthened.
• Pantheon Macroeconomics analysts noted that the average of the components corresponding to the ISM manufacturing survey's headline index increased slightly, driven by improvements in new orders and employment.

INDUSTRIAL/MANUFACTURING PRODUCTION:

• Industrial production rose 0.2% in February, exceeding the expected 0.1% (previous 0.7%).
• Manufacturing output increased by 0.2% (previous 0.8%), mining output by 0.8% (previous 0.9%), and utilities output decreased by 0.6% (previous 0.1%).
• Capacity utilization remained flat at 76.3%.
• Oxford Economics suggests that the fallout from the US/Israel-Iran war will be cushioned by: 1) consistent data for Q1 indicating no sudden stop in the AI investment cycle, and 2) the "One Big Beautiful Bill Act" increasing the after-tax return on capital investments.

FIXED INCOME

T-NOTE FUTURES (M6) SETTLED 15+ TICKS HIGHER AT 111-28+

T-notes experienced gains across the curve as oil prices declined. At settlement:

• 2-year: -4.9bps at 3.680%
• 3-year: -5.8bps at 3.689%
• 5-year: -6.6bps at 3.802%
• 7-year: -6.8bps at 3.996%
• 10-year: -6.3bps at 4.220%
• 20-year: -6.0bps at 4.834%
• 30-year: -5.1bps at 4.857%

THE DAY:

T-notes were firmer across the curve on Monday as oil prices eased with seemingly no fresh escalations in the war, while Trump looks to secure the Strait of Hormuz through a coalition, albeit details remain light. Regarding the movement higher in yields over recent weeks, Goldman Sachs thinks risks around yields are increasingly tilted to the downside. The desk revised their front-end yield forecasts to reflect a later profile of Fed cuts, but sees yields ending the year slightly lower than previously, with their end-2026 forecasts of 3.2% 2y and 4.1% 10y UST yields below the forwards. Morgan Stanley had also been talking about the potential demand destruction induced reversal towards lower rates. The sell-side commentary and move lower in crude prices seemingly supported T-Note trade on Monday amid a lack of key data, while attention turns to the Fed on Wednesday. On data, US Industrial Production slightly beat expectations alongside the Manufacturing output; meanwhile, the NY Fed manufacturing survey disappointed expectations. Although geopolitics remains in focus, there are plenty of central bank decisions due this week, including the Fed, BoJ, BoE, ECB, and SNB.

SUPPLY

Notes

• The US will sell USD 13 billion of 20-year bonds on March 17th and USD 19 billion of 10-year TIPS on March 19th, both settling on March 31st.

Bills

• The US sold 6-month bills at a high rate of 3.570%, with a bid-to-cover ratio of 2.64x; it sold 3-month bills at a rate of 3.610%, with a bid-to-cover ratio of 2.94x.
• The US will sell USD 86 billion of 6-week bills and USD 50 billion of 52-week bills on March 17th, both settling on March 19th.

STIRS/OPERATIONS

• Fed Rate Cut Pricing: March 0bps, April 0bps, June 3.9bps, December 24.1bps.
• NY Fed RRP op demand at 0.58bln across 9 counterparties on March 16th
• SOFR at 3.65%, volumes at USD 3.164tln on March 13th
• EFFR at 3.64%, volumes at USD 92bln on March 13th

CRUDE

WTI (J6) SETTLED USD 5.21 LOWER AT 93.50/BBL; BRENT (K6) SETTLED USD 2.93 LOWER AT 100.21/BBL

The crude complex was lower, as the Middle East war rages on, albeit with no major escalation over the weekend while crude was hit into settlement on reports that Witkoff and FM Araghchi have been texting. Trump said he ordered a strike that wiped out every military target on Kharg Island, where Iran exports nearly all of its oil, but left the oil infrastructure intact. On the Strait of Hormuz, which remains essentially closed, Trump’s admin plans as soon as this week to announce a coalition to escort ships, although they are still discussing if such operations would begin before or after hostilities have ended. In later remarks, on potential Strait of Hormuz coalition, the President remarked that Rubio will announce the countries in the coalition later, and some are fairly local, but caveated that it takes a while to get to the Hormuz. Trump also added, when asked about a deal with Iran, that Iran wants to make a deal, and they are talking to our people. Prior to these remarks, benchmarks saw downside as Trump once again reiterated that the Iranian war will end soon. Elsewhere, IEA's Birol was on the wires, but added little new, as he noted despite the huge release, still have a large stockpile, and can do more later, if required. Ahead of settlement, pressure was seen in crude to see the complex settle at lows after Israel's Channel 12 reported that US Special Envoy Witkoff and Iran's Foreign Minister Araghchi were in contact over text messages. WTI traded between USD 92.97-102.44/bbl and Brent USD 99.54-106.50/bbl, as focus, as expected, remains around the Middle East conflict.

EQUITIES

CLOSES:

• SPX: +1.05% at 6,702
• NDX: +1.13% at 24,655
• DJI: +0.83% at 49,946
• RUT: +0.96% at 2,504

SECTORS:

• Technology: +1.39%
• Consumer Discretionary: +1.34%
• Communication Services: +1.02%
• Financials: +0.87%
• Industrials: +0.85%
• Health: +0.75%
• Real Estate: +0.72%
• Utilities: +0.57%
• Materials: +0.57%
• Energy: +0.38%
• Consumer Staples: +0.07%

EUROPEAN CLOSES:

• Euro Stoxx 50: +0.44% at 5,742
• Dax 40: +0.57% at 23,570
• FTSE 100: +0.60% at 10,323
• CAC 40: +0.31% at 7,936
• FTSE MIB: +0.05% at 44,338
• IBEX 35: +0.19% at 17,093
• PSI: -0.15% at 9,130
• SMI: +0.49% at 12,882
• AEX: +0.61% at 1,008

STOCK SPECIFICS:

• National Storage Affiliates (NSA) is to be acquired by Public Storage (PSA) for USD 41.68 per share in a USD 10.5 billion transaction.
• Nebius (NBIS) signed a $12 billion AI capacity agreement with META; Meta is expected to spend up to $27 billion over 5 years on the AI deal.
• Sable Offshore (SOC) has been instructed to restore operations at the Santa Ynez Unit & Santa Ynez Pipeline System.
• Intuit (INTU) has halted management stock sales and accelerated its buyback program.
• Meta (META): Techzine reported that META denies rumours of sweeping layoffs to fund AI, which could affect up to 20% of its workforce.
• Alibaba (BABA) plans to introduce an agentic AI service for companies based on its Qwen model.
• Venture Global (VG): The Department of Energy authorized an immediate 13% increase in exports from the Plaquemines LNG terminal in Louisiana.
• Blue Owl Capital (OWL) Board unanimously urged shareholders to reject minority tender offer from Cox Capital Partners & Saba Capital Management for up to 8mln shares, worth c. $ 30mln.
• Ford (F) authorized repurchases of up to 31.7 million shares under an anti-dilutive buyback program.
• Dollar Tree (DLTR): EPS, rev. beat & sees annual sales largely below expected.

FX

The US Dollar weakened at the start of the week, partially reversing gains from the previous week amid the Middle East conflict, and was largely influenced by oil prices. Over the weekend and on Monday, numerous headlines and updates emerged regarding the conflict, but without significant escalation. President Trump announced a US strike on Kharg Island, avoiding oil infrastructure. When questioned about a potential deal with Iran, Trump stated that Iran desires a deal and is in communication with US representatives. Reports from Channel 12 suggested that Iran's Foreign Minister Araghchi and US Envoy Witkoff are reportedly in contact over text messages in recent days - apparently about ending the war. Traders are awaiting the upcoming Fed meeting on Wednesday, where rates are widely expected to remain unchanged, although dissents are possible.

G10 FX currencies strengthened across the board, with Antipodean currencies outperforming, supported by risk sentiment and ahead of the anticipated RBA rate hike overnight. Currency-specific news was limited on Monday, with price action primarily driven by oil. Modest weakness was observed in the Canadian Dollar following cooler-than-expected inflation data for February, preceding the BoC meeting on Wednesday. This week features a high volume of central bank decisions, including those from the RBA, BoC, Fed, BoE, BoJ, ECB, and SNB.

In EMFX, Chinese data was positive, with retail sales and industrial production exceeding expectations. Regarding US/China relations, Bessent described US-China trade meetings in Paris as "very good," and that we will see whether the Trump China visit goes as planned, but it is false to say that the trip may be delayed due to the Iran conflict. China’s Trade Negotiator Li, in talks with the US, spoke about a possible extension of tariff suspensions and other matters.