A look at the day ahead in European and global markets from Rae Wee The relief rally brought about by U.S. President Donald Trump's postponement of a threat to bomb Iran's power grid didn't even last
Trump's Iran Postponement Offers Little Relief as Markets React Worldwide
Global Market Reactions and Economic Impacts
A look at the day ahead in European and global markets from Rae Wee
Immediate Market Response to Trump's Decision
The relief rally brought about by U.S. President Donald Trump's postponement of a threat to bomb Iran's power grid didn't even last a day.
With Tehran denying it had engaged in negotiations with Washington and global energy supply still crippled, risk sentiment quickly turned sour in Asia on Tuesday and Brent crude futures swiftly bounced back above $100 a barrel.
Asian shares rebounded slightly in a catch-up rally to their global counterparts from overnight, but U.S. and European futures fell in choppy trade.
The dollar clawed back its losses, while U.S. Treasury yields resumed their climb.
Ongoing Tensions in the Middle East
Trump's Extended Ultimatum
Even as Trump added five days to his Saturday ultimatum for Iran to reopen the Strait of Hormuz within 48 hours, the situation remains tense and there's been little sign of an imminent end to the Middle East conflict.
Escalation Between Iran and Israel
Iran launched multiple waves of missiles at Israel, the Israeli military said, triggering air raid sirens in parts of the country including Tel Aviv, where blasts from interceptions were heard.
Energy Supply Shock and Global Responses
Government Actions to Secure Energy
The prolonged energy shock has also left governments around the world scrambling to secure supplies and finding ways to cut back on demand.
Japan's Strategic Oil Release
Japan plans to start releasing oil from joint stockpiles held by producing nations in the country by the end of March, Prime Minister Sanae Takaichi said in a post on X on Tuesday.
South Korea's Energy-Saving Campaign
South Korean President Lee Jae Myung called for a nationwide energy-saving campaign, saying public institutions would cut back on their use of passenger cars.
Trading Shifts in Oil Markets
Meanwhile, traders have offered Iranian oil to Indian refiners at a premium to ICE Brent after Washington temporarily removed sanctions to ease the energy crisis, three industry sources said.
Other Key Economic Developments
Japan's Inflation and Central Bank Challenges
Elsewhere in markets, data on Tuesday showed Japan's core consumer inflation slowed below the central bank's 2% target in February for the first time in nearly four years, making the Bank of Japan's communication more difficult as it seeks to raise still-low borrowing costs.
Upcoming Economic Data and Central Bank Speeches
Flash PMI readings for the euro zone, the UK and the U.S. are also due later on Tuesday.
Key Developments to Watch
Key developments that could influence markets on Tuesday:
- UK, euro zone, U.S. flash PMIs (March)
- ECB's Pedro Machado, Piero Cipollone and Philip Lane speak at separate events
- Fed's Barr speaks
(Editing by Jamie Freed)
