Crude eases as China negotiates safe passage through Hormuz; US jobs awaits - Newsquawk EU Market Open

• APAC stocks traded somewhat mixed following the risk-averse mood in the US as geopolitics continued to dominate headlines, and with participants also cautious heading into key US jobs data.
• US and Israel have increased airstrikes on Iran’s border with Iraq as US President Trump calls on the Kurdish minority there to rise up against Iran's government, according to the Washington Post.
• US Secretary of War Hegseth said the US has just begun to fight in Iran and that Iran is wrong in its calculations if it thinks the US can't continue the war, while he added that the firepower used in Iran is to increase significantly.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.0% after the cash market closed with losses of 1.5% on Thursday.
• Looking ahead, highlights include EZ GDP 3rd Est (Q4), US NFP (Feb), Retail Sales (Jan), Speakers including ECB President Lagarde, Cipollone & Schnabel, Fed’s Daly, Collins & Hammack, RBA’s Hauser, Credit Review including Fitch on France, DBRS on Greece.

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IRAN CONFLICT

• US President Trump said he supports Kurds launching an offensive into Iran and thinks it would be wonderful if they did. He commented that he is going to have a role in choosing Iran's next leader, much like Venezuela, but added it is very early in the process of picking a new leader and Khamenei's son is unlikely. Trump stated the Strait of Hormuz will be kept open and that the Iran operation is moving along ahead of schedule, but won't give a timeline. Furthermore, he is not currently mulling US troops in Iran and commented that Iran has been calling and wants to ‘make a deal’ to end the conflict.
• US Secretary of War Hegseth said the US has just begun to fight in Iran and that Iran is wrong in its calculations if it thinks the US can't continue the war, while he added that the firepower used in Iran is to increase significantly.
• US Central Command Commander said their operation against Iran is going well, and they are moving at a fast pace, while he added that ballistic missile attacks by Iran have decreased by 90% since day one, and they will dismantle Iran's missile production capability as they transition to the next phase of the operation.
• US House voted 219-212 to reject the war powers resolution on Iran.
• US and Israel have increased airstrikes on Iran’s border with Iraq as US President Trump calls on the Kurdish minority there to rise up against Iran's government, according to the Washington Post.
• Israeli military said it has begun a broad-scale wave of strikes against Iranian infrastructure in Tehran, while Iran's Mehr News Agency reported explosions and planes flying in some areas of Tehran. New Israeli raids were also reported in Beirut.
• Israel's representative to the UN said they will sink Iranian ships in the Strait of Hormuz, according to Al Jazeera. The official added that it will be much harder for Iran to disrupt vessels coming through the Strait of Hormuz in a few days and that they need to continue to dismantle Iran's capabilities before diplomacy.
• Iranian Foreign Minister Araghchi told NBC News that Iran is ready for a US ground invasion of the country, while he refuses any negotiations with the US and said that Iran had not asked for a ceasefire and that Iran sees no reason for more talks.
• Iran targeted Microsoft (MSFT) data centres in drone strikes, according to FT.
• Iran said it currently has no intention to close the Strait of Hormuz, according to AFP.
• Joint Maritime Information Centre said shipping and traffic in the Strait of Hormuz is at a near-total halt.
• Air raid sirens sounded across Kuwait amid reports of powerful explosions, according to Al Jazeera.
• Explosions were reported in the sky of Bahrain's capital of Manama. Furthermore, Bahrain's Interior Minister said the Iranian attack targeted two hotels and a residential building in Manama, causing material damage but with no injuries.
• Emergency alerts were sent to mobile phones in Qatar about a security threat, with Qatar's Interior Ministry advising all residents to stay inside and keep clear of windows and open areas
• Saudi Arabia's Defence Ministry reported the interception of three ballistic missiles launched towards Prince Sultan Air Base.
• Foreign ministers of Arab League member states will hold an emergency meeting on Sunday to discuss Iran’s attacks on several countries in the region, according to WSJ.
• UAE is mulling freezing Iranian assets to punish Tehran for attacks, according to WSJ.
• NATO increased alliance-wide ballistic missile defence posture, while allies support the recommendation to keep posture at a heightened level until threat from Iran subsides.
• French President Emmanuel Macron said his country was working to end fighting between Hezbollah and Israel, according to The Washington Post.

US TRADE

EQUITIES

• US stocks were once again sold amid the ever-escalating Middle Eastern tensions, albeit they came off lows into settlement amid reports that China is in talks with Iran to allow safe oil and gas passage through Hormuz. Following this, the crude complex pared some of its extensive gains, as did the Dollar, while spot gold and Treasuries both edged off lows. WTI and Brent still saw notable gains on the session amid the aforementioned geopolitical worries and the continued concerns regarding the sharp drawdown in traffic within the Strait of Hormuz. As such, broad trade today was risk-off as participants continue to deal with the impacts of the Middle Eastern war, and no signs of it abating any time soon.
• SPX -0.56% at 6,831, NDX -0.29% at 25,020, DJI -1.61% at 47,955, RUT -1.91% at 2,586.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump's new tariffs face a legal challenge by a group of states, with twelve US states to sue him to stop the latest worldwide tariffs, according to the Oregon Attorney General.
• US Treasury Secretary Bessent considers asking China to cut oil purchases from US adversaries ahead of President Trump's visit to China, while Bessent, along with former officials, business executives and policy analysts, are planning to firm up a framework for the April Trump-Xi summit. Furthermore, Bessent indicated that Washington is seeking expanded Chinese purchases of American soybeans and Boeing jets, as well as a relaxation of Beijing’s export controls on rare-earth elements.
• US drafts a rule requiring licenses for AI chip exports worldwide, in which NVIDIA (NVDA) and AMD (AMD) shipments to all countries would need US approval.
• US and Mexico will start talks on March 16th on reviewing their free trade agreement.
• Canada's US Trade Minister Leblanc will be visiting Washington on Friday.
• Canada and the EU signed a deal to modernise their economic and trade agreement.

NOTABLE HEADLINES

• US President Trump announced he was replacing Kristi Noem as the Homeland Security Secretary.
• Fed's Bowman (voter) said it is too early to tell the impacts of the war on the US economy.

APAC TRADE

EQUITIES

• APAC stocks traded somewhat mixed following the risk-averse mood in the US as geopolitics continued to dominate headlines, and with participants also cautious heading into key US jobs data.
• ASX 200 was dragged lower as the heavy losses in miners, materials and resources sectors offset the gains in tech and telecoms, while recent higher energy prices stoke inflationary concerns and narrow the policy space for the RBA.
• Nikkei 225 traded indecisively and swung between gains and losses with very little fresh macro catalysts for Japan.
• Hang Seng and Shanghai Comp trade higher, albeit to varying degrees, with the mainland rangebound, while Hong Kong outperforms amid tech strength and as participants reflected on recent earnings from the likes of JD.com and Bilibili.
• US equity futures are well off the prior day's trough but with price action contained as the NFP report looms.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.0% after the cash market closed with losses of 1.5% on Thursday.

FX

• DXY took a breather after gaining yesterday on a haven bid and as yields climbed on firmer oil prices, while there was a recent slew of data which mostly printed better-than-expected, while participants now look ahead to the looming jobs data.
• EUR/USD returned to the 1.1600 handle, but with upside limited amid ongoing geopolitical and energy-related concerns, while there was little reaction to the recent rhetoric from ECB officials, or the ECB Minutes, which noted that several argued rates could remain at current levels for an extended period if the baseline outlook held.
• GBP/USD lacked direction after rebounding from support at the 1.3300 level, with price action kept tame by quiet newsflow.
• USD/JPY proceeded sideways for most of the session amid the indecisive mood in Japan, and a quiet data calendar, with no tier-1 releases, although it gradually edged higher as risk sentiment in Japan stabilised.
• Antipodeans strengthened with AUD mildly outperforming amid a rebound in metal prices and as recent inflationary concerns spurred some outside bets for a rate hike by the RBA this month.
• PBoC set USD/CNY mid-point at 6.9025 vs exp. 6.8998 (Prev. 6.9007)

FIXED INCOME

• 10yr UST futures languished near the prior day's lows after declining on recent upside in energy prices and inflationary concerns, with price action contained overnight as the attention turns to the incoming NFP report.
• Bund futures attempted to nurse some losses following its recent slide, but with the recovery contained heading into the key US jobs data, while German Factory Orders and EU GDP revisions are also scheduled later.
• 10yr JGB futures were choppy amid the tentative mood in Japan and with a lack of tier-1 data releases for the region.

COMMODITIES

• Crude futures pulled back overnight after rallying again yesterday, with a mild reversal seen after it was reported that China is in talks with Iran to allow safe oil and gas passage through Hormuz, while it was also reported that the US issued a temporary 30-day waiver to allow the sale of Russian oil currently stranded at sea to India.
• China is reportedly in talks with Iran to allow safe oil and gas passage through Hormuz.
• US issued a temporary 30-day waiver to allow the sale of Russian oil currently stranded at sea to India.
• US President Trump is not looking to tap into the SPR. In relevant news, Trump’s chief of staff Wiles told advisers to bring ideas to the Oval Office to lower gasoline prices in the wake of the US attack on Iran, according to POLITICO, citing sources.
• White House senior official said the Treasury is expected to announce measures as soon as Thursday to combat rising energy prices that include using the oil futures market, with all options on the table.
• QatarEnergy informed Edison that it would not be able to fulfil its contractual obligations regarding five LNG cargo deliveries scheduled to arrive in early April.
• Saudi Arabia set the April Arab Light crude oil OSP to Asia at + USD 2.5/bbl vs Oman/Dubai average (prev. 0.00), while it set April Arab Light crude oil OSP to NW Europe at plus USD 2.85/bbl (prev. -0.65) to ICE Brent settlement.
• Venezuela’s President said they signed framework agreements with oil companies.
• Spot gold reclaimed the USD 5,100/oz level amid a slightly softer dollar and as the Iran conflict boosts haven appeal.
• CME cut COMEX 100 gold futures margins to 7% from 9.0% and COMEX 5,000 silver futures margins to 14% from 18%.
• Copper futures rebounded from the prior day's trough, with prices helped as Asia-Pac stocks clawed back opening losses.

CRYPTO

• Bitcoin was choppy and traded on both sides of the USD 71,000 level.

NOTABLE ASIA-PAC HEADLINES

• PBoC adviser Huang said China's push to shift its economy towards consumer spending will take a long time, while he added that investors should dampen expectations for “aggressive” stimulus as the government doesn’t view it as a “crisis time”.

DATA RECAP

• South Korean CPI MM (Feb) 0.3% vs. Exp. 0.4% (Prev. 0.4%)
• South Korean CPI YY (Feb) 2.0% vs. Exp. 2.1% (Prev. 2.0%, Rev. From 2%)

GEOPOLITICS

• US President Trump said “Cuba’s going to fall", while he reportedly revealed a growing frustration with Ukraine and the uncertain search for a new leader of Iran, according to POLITICO.

EU/UK

NOTABLE HEADLINES

• ECB President Lagarde said they will decide their monetary policy meeting-by-meeting, based on data and have no pre-set stance. Lagarde also stated that her term will expire in October 2027.