Erratic Futures, Oil Jittery As Iran Newsflow Drives Markets

US futures are mixed, first dropping overnight to session lows after Iran vowed to escalate its retaliation against US strikes and avenge the US sinking of an Iranian warship as the conflict entered its sixth day, before spiking to session highs after Bloomberg reported that Iran had previously signaled a willingness to eliminate its uranium stockpiles in return for “something good” during talks with the US before the strikes began (although the remarks related to earlier negotiations, the headlines were enough to shift sentiment which however faded in the absence of a signal from Washington). As of 8:00am ET, S&P futures were down 0.2%, but off session lows; Nasdaq futures dropped 0.1% despite a 7% jump in AVGO shares after earnings with Mag7 lower. Cyclicals outperform Defensives led by Fins / Energy. Brent briefly pared an advance before resuming its climb above $83 a barrel amid increasing disruptions to energy markets from the war and after China was said to have told its largest refiners to suspend exports of diesel and gasoline. European stocks were little changed. A benchmark for Asian equities trimmed its rebound of as much as 3.8%. The dollar rose 0.2%, 10-year TSY yields rose for a fourth straight day, trading above 4.13%. Commodities are higher led by Energy; base leading precious metals and Ags have a mild bid. Arab states across the Persian Gulf reported interceptions of Iranian missiles and drones. Today’s macro data focus is on Challenger Job Cuts (pay attention to AI-induced layoffs) and Jobless Claims ahead of tomorrow’s NFP / Retail Sales prints.

In premarket trading, Mag 7 stocks are mixed: Meta received a downgrade at Arete, which said that the social media giant is “lagging” in terms of AI monetization. Shares are down 0.4% (Microsoft +0.2%, Tesla -0.09%, Nvidia -0.2%, Alphabet +0.6%, Apple shares are unchanged, Amazon -0.3%)

Broadcom (AVGO) rises 6% after Chief Executive Officer Hock Tan said the company expects its AI chip sales to top $100 billion next year, marking major inroads into territory dominated by Nvidia Corp.
Burlington Stores (BURL) rises 6% after the off-price retailer’s fourth quarter adjusted EPS and revenue topped expectations.
Ciena (CIEN) falls 3% after the maker of equipment used by telecom companies posted first quarter results and provided a second quarter guidance.
Grocery Outlet (GO) drops 22% after the discount supermarket chain provided an adjusted earnings per share forecast for 2026 that’s well short of the average analyst estimate.
JD.com Inc.’s ADRs (JD) slip 1% after the company reported its first quarterly loss in nearly four years following a costly foray into food delivery.
Stubhub (STUB) falls 13% after the ticket reseller’s 2026 forecast and fourth-quarter results came in below Wall Street’s expectations. Analysts flag that comparisons are tough given that there wasn’t a Taylor Swift tour to boost sales.
Trade Desk Inc. (TTD) jumps 18% after The Information reported that the company held talks to help OpenAI sells ads.
Veeva Systems (VEEV) climbs 10% after the tech firm’s first-quarter adjusted earnings per share outlook came in above the average analyst estimate.

In other corporate news, Marsh and Aon, two of the world’s largest insurance brokers, are in talks with the US government on a plan to help insure tankers navigating the Strait of Hormuz. KPMG is said to be nearing a decision to appoint Gary Wingrove as the next global CEO.

Developments in the US-Israeli war against Iran are once again driving traders to curb risk after sentiment picked up in the previous session. Stress in energy markets is increasingly coming to the fore, with China seeking to conserve fuel and Japanese refiners calling for the release of strategic petroleum reserves. While Iran military commander Amir Heydari told state TV on Thursday the vital Strait of Hormuz isn’t closed, traders and analysts still expect it will take weeks before oil flows can resume meaningfully.

“If it is blocked for more than a week, the risk of sustained high energy prices would become real,” said Roberto Scholtes, head of strategy at Singular Bank. “If it is resolved quickly, the economic and financial impact would likely be negligible.”

For markets, any sign of the conflict easing is being jumped on, but concrete news is hard to come by. A report that Iran signaled in recent talks it was ready to relinquish its uranium stockpiles caused a brief spike which rapidly faded. The reaction shows the market’s bias to seize on anything approaching positive news, Bloomberg notes. The comments were made in an interview last night and look to be based on pre-conflict talks. Traders are also reassessing the “Sell America, Buy Asia” trade because of Asia’s outsize reliance on fuel shipments through the Strait of Hormuz. They’re also looking at 2022 playbooks — though JPMorgan strategists reckon that the anticipated inflation shock from Iran looks “a lot more contained” than after Russia’s invasion of Ukraine. The VIX futures curve returned to contango after having inverted earlier in the week, a sign of some tension leaving the equity market. For Citadel's flow guru Scott Rubner, now is the time to turn bullish on equities, while KKR co-CEO Scott Nutall is making a “shopping list” of opportunities to capitalize on market volatility.

The global bond selloff showed no respite, with the 10-year Treasury yield up three basis points to 4.13% while losses in Europe were steeper as Germany’s bunds headed for their worst week in a year on fears of an inflationary energy supply shock. Traders continued to dial back expectations for Federal Reserve interest-rate cuts as inflation expectations build and data reinforce the resilience of the economy.

As of now, “macro expectations have not materially repriced,” said Francisco Simón, European head of strategy at Santander Asset Management. “The risk scenario would be a combination of higher energy prices and a visible slowdown in activity, which would complicate the policy outlook and weigh on risk assets.”

Europe's Stoxx 600 is up 0.4%,reversing earlier declines following a report that Iran told the US before the war started that it was ready to get rid of its stockpile of highly enriched uranium. Gains are led by utilities, retail and media shares. Here are some of the biggest movers on Thursday:

STMicro shares rally as much as 7.1% after CEO Jean-Marc Chery guided data center-related revenue to be “well above” $1 billion for next year.
Airbus shares gain as much as 2.7% as Citi analysts upgraded the airplane maker to buy from neutral, citing a ramp-up in deliveries, an improving defense business and dollar strengthening.
Campari shares gain as much as 9.9% after the Italian spirits group reported full-year adjusted Ebitda ahead of expectations.
Puma shares gain as much as 5.6% after entrepreneur Mike Ashley disclosed a 5.8% interest in the German sportswear maker’s voting rights, mostly through put option arrangements.
Rentokil shares rise as much as 13% after the pest-control company reported results that Jefferies analysts described as encouraging, showing continued recovery in US growth.
Scandinavian Tobacco falls as much as 25%, the most on record, after the Danish cigar and tobacco producer’s fourth-quarter earnings missed estimates, with proposed dividend of DKK4.5 per share falling well short of consensus expectations of DKK6.83.
Wizz Air shares slide as much as 8.8% after the budget airline cut its net income forecast for fiscal year 2026 to below its previous guidance range, flagging a €50 million impact from conflict in the Middle East.
Nexi shares slump as much as 22% to a record low, after the payments company’s 2026 guidance showed profits in the near-term will be hit by higher investments.
PageGroup plunges 22% after the company slashed its dividend by half.
Deutsche Post shares fall as much as 6.4% after the German logistics company gave an outlook for 2026, with Ebit at above €6.2 billion compared to earlier estimates at €6.39 billion.
AB Foods shares drop as much as 1.4%, lagging retail peers, after the consumer goods company made interim Primark CEO Eoin Tonge permanent, a move Barclays analysts said may disappoint investors who favored an external hire.

Earlier in the session,. Asian stocks rebounded as risk sentiment improved following a three-day selloff spurred by concerns over the conflict in the Middle East. The MSCI Asia Pacific Index rose as much as 3.8%, the most since April 10, with chipmakers Samsung, TSMC and SK Hynix among the biggest boosts. South Korea led advances, with the Kospi notching its best gain since 2008, bouncing back after its worst daily rout on record. Most key regional gauges were in the green. While traders are still gauging the length and impact of the Iran war, some investors are coming back into the market amid more palatable valuations after the recent selloff. Continued gains in oil remain a concern given the potential to accelerate inflation and quash Federal Reserve plans to lower interest rates. Stocks rose in China and Hong Kong after the government unveiled economic targets that market participants said were in line with expectations. That came as Beijing kicked off its annual “Two Sessions” meetings, which investors are closely watching in hopes of supportive policies.

Earnings season is almost over: Ciena and Kroger are among companies expected to report results before the market open. Kroger’s pricing will be in focus given intense competition, limited grocery inflation and ongoing consumer uncertainty. Earnings from Costco, Gap and Marvell Technology follow later in the day. It’s the final day of the MS TMT conference in San Francisco, with Perplexity and Crowdstrike among companies presenting.

In FX, the Bloomberg Dollar Spot Index is up 0.2%.EUR/USD down 0.2% to 1.1617, after falling as much as 0.5%; European Central Bank Vice President Luis de Guindos said a prolonged conflict in the Middle East would risk pushing inflation expectations higher, one of a number of ECB speakers to give non-committal views on the war’s impact. EUR/GBP little changed around 0.8703. EUR/CHF set for a third daily drop, slips 0.2% to 0.9054;x

In rates, treasuries hold small losses but outperform European bond markets after oil rose as much as 4.6% amid mounting supply disruptions from Middle East war before fading much of the gains. 10-year near session high 4.13% is 3bp higher, bunds and gilts in the sector about 6bp higher. US yields are about 2bp-3bp cheaper across the curve led by belly tenors, flattening 5s30s spread by around 1bp. European government bonds fall as traders boost bets on tightening by the ECB this year and less easing by the Bank of England. Focal points of US session include weekly jobless claims data and potential for corporate new-issue market to compete for duration needs.

In commodities, energy prices retreated while European stocks and US equity futures caught a bid after a report that Iran had previously told the US it was ready to get rid of its uranium stockpiles. Brent fell back to flat at one stage but has since climbed back up to around $83 a barrel. European natural gas futures briefly slipped into the red before turning higher again. Precious metals advance with spot silver climbing 1%.

US economic data slate includes February Challenger job cuts (7:30am New York time), January import/export price indexes, 4Q nonfarm productivity and weekly jobless claims (8:30am). Fed speaker slate includes Bowman (1:15pm) and Goolsbee (7pm).

Market Snapshot

S&P 500 -0.2%
Nasdaq 100 -0.2%
Russell 2000 mini -0.4%
Stoxx Europe 600 +0.4%
DAX +0.2%
CAC 40 +0.3%
10-year Treasury yield +3 basis points at 4.13%
VIX +0.2 points at 21.33
Bloomberg Dollar Index +0.1% at 1201.63, euro -0.1% at $1.162
WTI crude +2.1% at $76.2/barrel

Top Overnight News

Iran’s Revolutionary Guards have tightened their grip on wartime decision making despite the loss of top commanders, senior sources say, driving a hardline strategy that is propelling Tehran's drone and missile campaign across the region. RTRS
Iranian drone attacks could disrupt the Strait of Hormuz for months, but how long the Islamic Republic could sustain its missile barrage is less clear, according to intelligence sources and military analysts. RTRS
President Donald Trump’s chief of staff, Susie Wiles, is telling his advisers to bring ideas to the Oval Office to lower gasoline prices in the wake of the U.S. attack on Iran, according to two energy industry executives familiar with the conversations. Politico
Pro-American, Iranian Kurdish forces based in Iraq are preparing armed units that could enter Iran, creating a potential new front in an already expanding conflict. NYT
The US countered Cuba’s steps to loosen the government’s grip on the economy by barring fuel transactions through Cuban banks. BBG
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
US Senate Republicans await the endorsement of President Trump in the Texas Republican Senate runoff between Cornyn and Paxton, billed as a choice between an established Republican candidate, and a MAGA firebrand: Politico
US-brokered peace talks between Ukraine and Russia initially planned for this week are postponed indefinitely due to the war in Iran, President Volodymyr Zelenskiy said. BBG
A federal trade-court judge on Wednesday ordered the Trump administration to start refunding the more than $130 billion it collected in the global tariffs invalidated by the Supreme Court last month. WSJ
China set its annual GDP goal at a range of 4.5% to 5%, its least ambitious target since 1991, signaling a tolerance of slower expansion. It modestly dialed down fiscal stimulus. BBG
The ECB has no reason to raise interest rates as of today in response to higher oil prices, Governing Council member Francois Villeroy said. BBG
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.

A more detailed look at global markets courtesy of Newsquawk

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.

Top Asian News

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.

European bourses (STOXX 600 +0.4%) are mixed, with the IBEX 35 (+1.0%) leading while the SMI (-0.2%) lags slightly as distributor Kuehne+Nagel (-1.9%) weighs on the index. European sectors are tilted positively, with Utilities (+1.1%) outperforming while Basic Resources (-0.6%) sit at the bottom of the pile despite gains in metal prices. Technology (+0.8%) has been benefiting today after STMicroelectronics (+5.6%) announced a new generation of MCUs to boost performance of tiny smart devices while meeting extreme cost, size and power limitations.

Top European News

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%).

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.

DXY is mildly firmer this morning and currently trades within a 98.66 to 99.20 range; upside which follows on from some mild pressure in the prior session, as investors favoured risk assets. Haven inflow 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. It is worth highlighting that Sky News Arabia reported commentary via the Iranian Deputy Foreign Minister who suggested that Iran “is prepared to abandon its nuclear program” on the condition that 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 once again 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

A bearish start for fixed with energy dynamics once again dictating price action. USTs and Bunds lower by 11 and over 50 ticks, respectively. In brief, the ongoing Middle East conflict is bolstering yields and, in turn, weighing on benchmarks themselves. USTs down to a 112-15+ low, notching an incremental new WTD base. If the move continues, we look to recent support at 112-06, 112-04, 111-31, 111-26, 111-13+.
For the US, and generally, today's focus is firmly on any geopolitical updates, particularly around Iran's uranium stockpiles in light of recent reporting. That aside, the day features weekly claims (does not coincide with the BLS window), Challenger jobs in addition to the Revelio and Chicago Fed statistics. Of note for PCE, the latest export/import prices will hit. The speaker docket has Fed's Bowman (voter), and while we are not guided to a text, there will be a Q&A.
Within Europe, the story is much the same. The docket ahead is headlined by the ECB Minutes, though given recent developments, they are likely even more stale than typical. No real reaction to supply from France or Spain. As it stands, Bunds are at a 127.67 trough, approaching the WTD 127.50 base.
Gilts experienced another morning of catch-up trade, but this time with a bearish bias given the lead from peers and movements in energy prices. No reaction to the latest DMP, the views of which are now somewhat stale. Currently holding around 20 ticks off a 91.46 low, but still lower by over 40 ticks on the day.
EU is said to considers joint defence bonds amid concerns around the Iran war, Welt reported; a proposal is to be presented; defence bonds could be backed by member states.

Commodities

Crude benchmarks remain underpinned by the ongoing geopolitical conflict in the Middle East, despite facing mild 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/bbl, 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 edged higher but then stalled near the vicinity of USD 5,200/oz. Price action was relatively tame compared to recent moves, and there was little reaction to news that Venezuela's Minerven inked 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/t. Sentiment for the red metal has been weighed down by China, its biggest market, which set its lowest GDP growth target since 1991. Elsewhere, JPMorgan said if increased headlines indicate material disruptions to Middle East supply, then aluminium prices have the potential to quickly run toward USD 4,000/mt.
Saudi Aramco diverts more of its crude exports to the Red Sea port to bypass the Strait of Hormuz, WSJ sources reports.
China's state iron ore buyer reportedly summons 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.
EU reportedly mulls aid to fix Ukraine's oil plant at centre of its loan delay, according to sources.
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.
Iranian Revolutionary Guard said it hit a US oil tanker earlier this morning, SNN reported; Tanker hit in 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 in talks with the IEA and OPEC over the situation on crude oil supply, according to sources.

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.

Geopolitics: 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.

US Event Calendar

8:30 am: Jan Import Price Index MoM, est. 0.3%, prior 0.1%
8:30 am: Feb 28 Initial Jobless Claims, est. 215k, prior 212k
8:30 am: Feb 21 Continuing Claims, est. 1845k, prior 1833k
1:15 pm: Fed’s Bowman In Moderated Discussion
7:00 pm: Fed’s Goolsbee Speaks at Foreign Policy Association

DB's Jim Reid concludes the overnight wrap

Markets finally showed signs of stabilising yesterday, with investor fears easing thanks to a strong batch of US data, and the absence of any major escalations in the Middle East. Brent crude held steady at $81.40/bbl, having just seen its strongest two-day gain since 2020 at the start of the week. And financial stress came down across the board, with the S&P 500 (+0.78%) moving back within 2% of its record, whilst the VIX index (-2.42pts) fell to 21.15pts. Moreover in Asia this morning, equities have seen a very strong recovery, including an +11.02% gain for South Korea’s KOSPI after the previous day’s slump.

However, even as a lot of key assets began to recover, the geopolitical situation is clearly moving fast, and oil prices are moving up again overnight, with Brent back up +3.18% to $83.99/bbl. That comes as both the US and Iran have made clear they aren’t backing down, and other assets have also lost a bit of ground too. For instance, S&P 500 futures (-0.12%) have pulled back a bit, whilst 10yr Treasury yields moved up another +2.5bps overnight to 4.12%.

So while broader market contagion has eased somewhat, we’ve seen no signs of de-escalation yet, and oil prices are continuing to move higher. That comes as the IRGC said they would intensify and expand strikes in the coming days, while the US confirmed it had sunk an Iranian warship in the Indian Ocean near Sri Lanka. There was also little clarity over the war’s potential length, with US Defense Secretary Pete Hegseth saying “it could be six, it could be eight, it could be three” weeks. There’s also uncertainty on when shipping will resume through the Strait of Hormuz, and we’ve seen signs of oil importers beginning to adjust behaviour. For example, Bloomberg reported overnight that China had told the biggest oil refiners to suspend exports of diesel and gasoline.

Markets have also remained very sensitive to headlines, with oil prices seeing a clear intraday fall yesterday after a New York Times report said Iranian operatives had reached out indirectly to the CIA to discuss terms that would end the conflict. While this was later denied by Iran, it still helped limit the upward pressure on energy prices, and we also saw front-end European natural gas futures down -10.17% yesterday, having risen by almost +70% in the previous two days. In turn, that helped to push back against the ECB hike speculation for this year, with yields on 10yr bunds (-0.2bps), OATs (-2.6bps) and BTPs (-2.8bps) all coming down.

As all that was going on, investors got further reassurance on the outlook from the latest US data, which painted a consistently strong picture. For instance, the ISM services index rose to its highest since 2022, at 56.1 in February (vs. 53.5 expected). Moreover, the components were very positive too, with new orders surging to a 17-month high of 58.6, whilst prices paid came down to an 11-month low of 63.0. So the message from the print was the reverse of the stagflationary shock coming from the Middle East. On top of that, we also got the ADP’s report of private payrolls, which showed private payrolls up by +63k in February (vs. +50k expected). That was the strongest print in 7 months, so again a positive reading ahead of tomorrow’s US jobs report.

That backdrop of strong data meant investors kept pricing out the likelihood of an H1 rate cut from the Fed. Indeed, the probability of a cut by the June meeting (which would be the first with a new Chair) fell to just 39% by the close, the lowest so far this year. So clearly there’s growing scepticism that a new Chair can start cutting straight away, particularly with the data as strong as it is right now. And in turn, that meant Treasury yields continued to move higher across the curve, with the 2yr yield (+4.1bps) up to 3.55%. Meanwhile, the 10yr yield (+3.7bps) rose to 4.10%, and it’s seen another +2.5bps overnight to 4.12%, leaving it a full +18.3bps higher since Friday’s close.

In the meantime, equities also benefited from the strong data and the stabilisation in energy prices, with a clear rally for indices on both sides of the Atlantic. In the US, the S&P 500 (+0.78%) recovered most of Tuesday’s decline, aided by a particularly strong performance from tech stocks. Indeed the Magnificent 7 (+1.52%) actually surpassed its levels on Friday, prior to the latest escalation in the Middle East. Meanwhile in Europe, there was also a strong rally across the continent, with the STOXX 600 (+1.37%) recovering, alongside gains for the DAX (+1.74%), the CAC 40 (+0.79%) and the FTSE 100 (+0.80%).

Over in Europe, there was fresh news on the tariffs, as Bloomberg reported that the EU had received assurances from the US that they’d keep the 10% universal tariff rate for the bloc, rather than raise it to 15%. As a reminder, the US have placed a 10% universal tariff after the Supreme Court ruled against the previous IEEPA tariffs. But Trump has said he’ll raise that to 15%, and Treasury Secretary Bessent said that increase was “likely sometime this week”.

In other tariff news, refunds were also in the headlines after a US judge ordered the Customs and Border Protection to stop calculating IEEPA tariffs on importers’ customs paperwork, calling for the refund process to be carried out “pretty smoothly”. Earlier, the administration had confirmed to the court that it would pay interest on any tariff refunds it has to make. So an ongoing story to monitor as the timing and extent of refunds could have a material impact on the fiscal picture.

Turning to Asia, we’ve seen a very strong performance overnight after yesterday’s selloff. Notably, South Korea’s KOSPI (+11.02%) is currently on track for its biggest daily gain since 2008, after posting a -12.06% decline yesterday. And there’ve been consistent gains across Asia, with the Nikkei (+2.37%) recovering after 3 days of losses, alongside advances for the CSI 300 (+1.36%), the Hang Seng (+1.04%) and the Shanghai Comp (+0.98%).

Over in China, it’s also been announced that the growth target will be 4.5-5%, which is slightly beneath the 5% target over the previous 3 years, and the lowest target since 1991. Otherwise, it was announced that the CPI target would be around 2%, and the budget deficit was planned to be around 4%.

Looking at the day ahead, data releases include Euro Area retail sales and French industrial production for January, the German and UK construction PMIs for February, as well as the US weekly initial jobless claims. Central bank speakers include ECB President Lagarde, Vice President de Guindos, the ECB’s Nagel and Rehn, and the Fed’s Goolsbee. Otherwise, the ECB will publish the account of its February meeting.

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