Public Markets 8-Hour Briefing

Global Market Turmoil

European stocks tumbled in their biggest two-day drop since April as Middle East conflict intensified. Asian stocks extended losses into a second day as mounting tensions intensified risk-off sentiment. US futures fell alongside major European indices as the widening Iran war rattles global markets, with bonds slumping as soaring energy prices fan inflation fears. The S&P 500 ended lower marking its first two-week loss since June as traders priced out the probability of a second Bank of England rate cut this year.

Energy Market Shock

European natural-gas prices surged after Qatar's LNG facility shutdown, with Rabobank lifting its TTF price forecast to €50 per megawatt-hour. Power futures jumped in Japan as the conflict threatens gas supplies, while coal prices climbed the most in three years due to fuel-switching needs. Strait of Hormuz disruptions are expected to last weeks, according to Rabobank, as Asian oil refiners consider reducing operating rates amid supply concerns.

Central Bank Policy Shifts

Traders have ditched bets on a second BOE cut as inflation fears spiral, with food inflation in the UK edging higher in February. ECB officials stated they won't set rates based solely on energy prices, while ECB's top economist warned that a lengthy Iran war could cause inflation "spike." The Bank of England faces growing pressure as Middle East tensions rekindle inflation concerns that may delay further monetary easing.

Corporate Developments

South Korea's arms-maker saw its stock surge 20% to a record as the company deepens its foray into the Middle East amid regional threats. Beiersdorf shares slid after the Nivea maker forecast a sluggish fiscal year, while Greggs reported a profit slump last year as the British bakery battles weak consumer sentiment. Fresnillo earnings jumped on higher precious metal prices, enabling the miner to deliver its highest dividend since listing in 2008.