Headlines:

• The hawkish repricing in interest rates expectations continues as US-Iran war escalates
• Gold plunges to new lows as US-Iran war escalates and the Fed considers a rate hike
• Silver drops by over 5% and the chart shows that there might be more trouble up ahead
• A quick rundown of how Iran has hit back after South Pars gas field was attacked
• US explores use of govt insurance in escorting ships through Strait of Hormuz – report
• SNB leaves key policy rate unchanged at 0% in March meeting, as widely expected
• SNB chairman Schlegel: Swiss franc rise poses risk to price stability
• BOJ governor Ueda: A rate hike is possible under a temporary economic downturn
• BOJ governor Ueda says result of wage talks this year could be better than past years
• BOJ governor Ueda: Need to pay attention on further developments in the Middle East
• UK January ILO unemployment rate 5.2% vs 5.3% expected

Markets:

• Oil prices stay elevated amid rising Middle East tensions
• Brent crude oil up 7% to $115.03, WTI crude oil up 1.3% to $97.50
• US dollar eases slightly after post-Fed gains
• EUR/USD up 0.2% to 1.1468, USD/JPY down 0.5% to 159.08 after BOJ leaves door open for rate hikes
• Precious metals come under heavy pressure as the selling this week continues
• Gold down over 3% to $4,665, Silver down over 6% to $70.59
• Equities get hit by a reality check after yesterday’s drop
• Major indices in Europe down over 2%, S&P 500 futures down 0.4%
• US 10-year yields up 3 bps to 4.285%

The tensions in the Middle East continues to captivate markets and that is keeping traders and investors on edge still today.

Oil prices continue to move up, with Brent crude oil especially surging higher to rival the 9 March spike as the high hit above $119 today. This comes as European gas prices also shoot up further after Iran continues to hit back at key facilities across the region in retaliation to the attack on its South Pars gas field. So much for de-escalation and the war ending soon, eh?

And all of this comes after the more hawkish hold by the Federal Reserve yesterday, giving markets a bit of a reality check after some optimism earlier in the week.

Equities are sold off heavily across the board with major indices in Europe down over 2%. Dutch TTF gas futures have jumped up to near $70, at its highest since early 2023. And that continues to push higher rate hike odds by the ECB.

Meanwhile, US futures are also seeing the mood dampened with S&P 500 futures down 0.3%. That follows the drop yesterday, which now threatens key technical levels on the charts again – the same goes for the Nasdaq.

As the selloff broadens, we’re seeing precious metals also get caught up by another wave of heavy selling as well. Gold is down over 3% to $4,665 while silver is down over 6% to $70.59 on the day. It’s a big blow to the modest recovery in February, with prices now threatening to fall back to the lowest levels this year.

In the major currencies space, things were calmer as the dollar sees its post-FOMC gains ease up a little. USD/JPY was in focus as the BOJ tried to keep the door open for rate hikes, with the pair down 0.5% to 159.05 on the day. Meanwhile, the Swiss franc is lower after the SNB delivered a strong message in saying that they will intervene in the market to limit the currency’s gains. EUR/CHF is seen up 0.4% to 0.9120 currently.

The central bank bonanza continues with the BOE and ECB coming up next. However, the main story will continue to be what happens in the Middle East.

This article was written by Justin Low at investinglive.com.