0858 ET - Treasury yields and the U.S. dollar rise amid the historical spike in oil prices. Brent and WTI crude rise 11%. Developed countries talk about releasing oil reserves. Economists surveyed by WSJ expect February CPI on Wednesday to be little changed from January. Inflation is expected to pick up due to the war, while some analysts believe the Fed will look through it and focus on weakening employment. The Fed is expected to hold rates unchanged next week and markets are increasingly pricing only one cut this year. The 10-year yield is at 4.167%, up from 4.131% Friday. The two-year rises to 3.598% from 3.554%. The WSJ Dollar Index rises 0.3%. (paulo.trevisani@wsj.com; @ptrevisani)

0856 ET - Federal Reserve officials have had their say before the March policy meeting. The traditional pre-meeting communications blackout ahead of the March 18 decision started over the weekend. Traders are firm in their conviction that the policy committee will hold rates steady for a second straight meeting. More closely watched: Whether the new dot plot could bring an updated projection for 2026 rate cuts. In December, the median official projected three rate cuts this year. If three officials who previously favored a cut flip to favoring a hold, the median projection would tick up to zero rate cuts in 2026. On the other hand, if at least two officials who previously favored one cut or fewer now favor two cuts or more this year, the projection would move lower to show a median forecast of at least a half point of easing in 2026. The futures market remains decisively more dovish than the December dot plot. (matt.grossman@wsj.com; @mattgrossman)

0847 ET - Rising oil prices amid the Middle East conflict have pushed up expected inflation. In the near future, financial markets might price in even more forecast inflation, JPMorgan's Phoebe White writes. Yet traders should be mindful of the risk that higher oil prices wind up weighing on demand and damping economic growth, potentially sending inflation lower, not higher, White writes. " We are concerned that any further increase in oil prices, particularly if it is sustained, could depress aggregate demand and short-circuit the recovery in business sentiment now underway," White writes. (matt.grossman@wsj.com;@mattgrossman)

0853 ET - The Hungarian forint, Czech koruna and Polish zloty weaken as the Middle East conflict dents risk sentiment and drives up energy prices. Central and Eastern Europe remains one of the most exposed zones to the conflict, ING's Frantisek Taborsky says in a note. The forint is considered most vulnerable to higher energy prices and inflation concerns, he says. Earlier bets on a stronger forint also explain why it's under the most pressure as investors trim those positions, he says. The euro rises 1.1% to 396.77 forint after reaching a seven-month high of 399.18 earlier, LSEG data show. The euro gains 0.2% to 24.408 koruna after hitting a six-month high of 24.463 earlier. The euro increases 0.4% to 4.2770 zloty.(renae.dyer@wsj.com)

0844 ET - Surge in energy prices has reignited inflation concerns, causing markets to price in the risk of the U.K. and eurozone central banks raising interest rates in the coming months, Capital.com's Daniela Hathorn says in a note. Markets have also scaled back their rate cut expectations from the U.S. Federal Reserve. The energy price shock complicates the role of central banks, raising inflation risk at a time when economic growth appears to be slowing, Hathorn says. Markets price in a 75% chance of the Bank of England raising interest rates and fully price in one rate rise by the European Central Bank this year, LSEG data show. (miriam.mukuru@wsj.com)

0821 ET - The South African rand falls sharply as gold prices decline. Gold prices fall as the Middle East conflict fuels inflation concerns, reducing the prospect of further interest rate cuts by the Federal Reserve and strengthening the dollar. The dollar is also boosted by its safe haven status and America's energy independence. A stronger dollar makes dollar-denominated commodities more expensive for overseas buyers, hitting gold. The rand is further dented by broad-based risk aversion stemming from the conflict. The dollar rises 1.2% to 16.7439 rand after earlier hitting a near three-month high of 16.9160, according to LSEG. (renae.dyer@wsj.com)

0718 ET - European mining and steel companies could suffer as escalating conflict in the Middle East damps Europe's growth outlook and threatens to push interest rates higher, analysts at J.P. Morgan say. The conflict will cause similar consequences to those which followed Russia's full-scale invasion of Ukraine in 2022--a conflict that triggered a fall of around 40%--the analysts say. Metal prices are disproportionately hurt by knocks to global growth, a risk that isn't properly reflected in the sectors' stock prices, they add. Steelmaker ArcelorMittal falls 6.45%, while copper and iron ore miner Anglo American drops 6.3%. Austrian steel company Voestalpine tumbles 9%.(josephmichael.stonor@wsj.com)

0639 ET - Eurozone fuel prices are already rising due to the war in Iran, Berenberg analysts say in a note. But the uptick is likely to be less pronounced than following Russia's invasion of Ukraine, they say. "The impact of higher energy prices on headline inflation depends on whether the shock is permanent or transitory, and on how it transmits to core inflation." The experience of 2022 shows that governments can intervene to offset the rise in prices, the analysts say. Meanwhile inflation is currently below target. But if oil prices hit $130, this could drive inflation up by 0.9 percentage points in 2026. "Under those circumstances, the ECB would probably deem it necessary to tighten policy in order to avoid second round effects," they say. (don.forbes@wsj.com)

0636 ET - Sterling falls against the dollar as global risk aversion rises along with oil and gas prices due to the growing Middle East conflict, Convera strategist George Vessey says in a note. Against the euro, however, sterling remains elevated after reaching a one-month high overnight. The U.K. is less dependent on imported oil than the euro-area. However, U.K. inflation is much more elevated compared to the euro-area. Markets could entertain the possibility of the Bank of England raising interest rates, which would unsettle the U.K. government bond market and tighten financial conditions as growth weakens, he says. Sterling falls 0.6% to $1.1551. The euro trades flat at 0.8660 pounds after reaching a low of 0.8650 overnight, LSEG data show. (renae.dyer@wsj.com)

0635 ET - Countries with larger equity markets appear to be faring better as the Middle East crisis deepens, with China and the U.S. holding up better than most, Capital Economics says in a note. Asia-Pacific markets head Thomas Mathews suggests this partly reflects their relatively limited exposure to Middle Eastern energy imports. For China's economy, a weaker yuan may have also helped cushion the impact, he writes. However, given that Chinese markets tend to outperform during the annual National People's Congress meeting, their resilience may fade if the conflict in Iran drags on. Elsewhere, CE expects Japanese government bonds to perform relatively well, as the government's fiscal position will likely remain strong and the BOJ is unlikely to hike rates much faster. (jason.chau@wsj.com)

0608 ET - Malaysia stands to be the only Asian economy to benefit if oil prices remain around $100 a barrel for the rest of the year, DBS Group Research writes in a note. The country is more reliant on coal and gas for electricity generation as it works toward renewables making up a higher share, according to economist Chua Han Teng. Malaysia is also a net LNG exporter, he says. "And imports were largely from Australia, leaving it less exposed to supply shocks from the Middle East uncertainty." That is despite its crude oil exposure to the region, Chua notes. "As an overall net oil & gas exporter, Malaysia could see trade upside in the absence of a sharp global slowdown, while upward inflationary pressure would be limited by subsidies." (farah.elias@wsj.com)
source: https://www.tradingview.com/news/DJN_DN20260309004915:0/