Public Markets 8 Hours

Last updated: March 31, 2026, 5:30 AM ET

Geopolitical Turmoil Drives Inflation & Energy Volatility

Global markets faced heightened volatility across energy and fixed income sectors as traders grappled with conflicting reports regarding the conflict in the Middle East, leading European rates markets toward their most volatile month on record. Reports suggesting President Trump signaled willingness to end war briefly sent FTSE 100 futures and the British pound higher, though oil traded cautiously higher as investors weighed the geopolitical risks. The conflict continues to fuel inflationary pressures globally; French inflation accelerated to its fastest pace since August 2024 due to surging energy costs, prompting ECB’s Muller to suggest borrowing costs will likely rise in upcoming quarters. Meanwhile, the cost to deliver perishables like fruit and salmon has climbed as diesel prices rise, and Unilever Plc announced a hiring freeze for three months to manage escalating shipping expenses.

Energy Markets Brace for Prolonged Disruption

The potential for sustained supply disruption has sent shockwaves through commodity markets, with forecasts suggesting extreme price spikes if the Strait of Hormuz remains heavily restricted. Energy consultancy FGE Nexant E warned that crude oil could surge to between $150 and $200 per barrel should the closure persist for six to eight weeks. This tightening supply picture caused spot power prices in Japan to surge to a three-year high, while aluminum futures headed for a 10% monthly increase due to damaged regional production facilities. In response to rising fuel costs, interest in electric vehicles is spiking, with reports indicating a surge in advert views and test drives, though Australia’s move to halve its retail fuel tax will take time to reach consumers.

Asia Grapples with Energy Security and Capital Outflows

Asian economies are actively securing energy supplies and managing capital flows amid the uncertainty, with the conflict severely clouding regional outlooks. The cost to insure better-rated Asian debt against default is set for its largest monthly increase since 2023, reflecting growing systemic concern. Japan is intensely focused on supply chains, establishing a joint task force between its economy and health ministries to secure essential medicines, while spot power prices hit a three-year peak. Concurrently, Indonesian President Prabowo Subianto and Japanese Prime Minister Sanae Takaichi pledged deeper economic cooperation specifically addressing energy security needs. In South Korea, the central bank nominee maintained that dollar liquidity remains ample despite currency volatility, while Taiwan’s stock market outperformed South Korea’s by the widest margin since 2009, signaling relative regional strength.

Corporate Activity: Deals, Stakes, and IPO Prep

Corporate restructuring and dealmaking continue across various sectors despite market jitters. Volvo Car is increasing its stake in Polestar to 19.9% from 9.8% by converting existing debt into equity, while Chinese appliance giant Midea Group is considering a convertible bond sale that could yield approximately $2 billion. Seed and pesticide giant Syngenta Group boosted profits ahead of a potential Hong Kong listing, focusing on higher-margin offerings. In technology, UK-based Raspberry Pi reported a 25% sales increase, largely driven by strong demand from the US and China, which also bolstered the company’s overall profit. Furthermore, Blackstone is reportedly planning a $500 million IPO in Mumbai for its AGS Health unit.

Central Banks and Policy Responses

Central banks across Asia and Europe are navigating inflation driven by external shocks, often prioritizing stability over immediate rate adjustments. The Bank of Thailand signaled a wait-and-see policy, asserting that rate cuts are ineffective against Middle East-driven oil price increases, though they remain open to other measures. India’s central bank delayed stricter trading loan rules to provide relief amidst market volatility caused by the ongoing conflict, prioritizing financial system stability over immediate regulatory tightening. Meanwhile, the UN estimates the ongoing war could cost the Middle East region nearly $200 billion in lost economic growth.

Financial Markets & Asset Management Moves

In capital markets, Goldman Sachs and Bank of America are positioned to capture a larger share of Japan’s equity capital market deals, benefiting from increased block trade activity. Oaktree Capital Management-backed 17Capital LLP successfully raised about $7.5 billion for its latest net-asset-value loan fund, contrasting with broader concerns over private capital returns. Separately, international official holdings of US Treasuries held at the New York Fed have fallen to their lowest level since 2012, suggesting foreign central banks are reducing their exposure following the war’s outbreak. Asset manager BlackRock is reportedly looking at leasing at least 600,000 square feet in HSBC’s Canary Wharf tower for a new London headquarters.