• Investors are most long commodities since April 2022; stock market sentiment turns bearish
• Iran’s Supreme Leader says “not the right time for peace”, US and Israel must be defeated
• Germany March ZEW economic sentiment index -0.5 vs 39.0 expected
• Strait of Hormuz disruption keeps oil prices supported; de-escalation is the only fix
• Italy February final CPI +1.5% vs +1.6% y/y prelim
• Military escorts not a sustainable solution to opening up Strait of Hormuz, says IMO chief
• Gold remains stuck in a tight range as traders await new catalysts to trigger a breakout
• Switzerland February producer and import prices -0.3% vs -0.2% m/m prior
• What are the main events for today?
• One down, six more to go on the week..
• FX option expiries for 17 March 10am New York cut
• RBA governor Bullock: If we have to change tack on policy, we will do so
• RBA governor Bullock: Cash rate was not high enough to bring inflation back to the target
• Aussie dollar sees a mixed reaction as the RBA delivers another rate hike today

It’s been a light session in terms of news releases and market moves. On the data front, the main highlight was the German ZEW survey which collapsed to -0.5 vs 58.3 in the prior month. The US-Iran war and the surge in energy prices were responsible for this poor reading.

On the news front, we just got a Reuters report saying that Iran’s new Supreme Leader has rejected proposals aimed at de-escalating tensions with the United States and Israel according to a senior Iranian official.

The official told Reuters that Khamenei’s stance for revenge against the US and Israel was “very tough and serious”. He reportedly told the session that the Islamic Republic would not seek to reduce tensions until the US and Israel are defeated and forced to pay compensation for damages.

On the markets front, the US dollar continues to pull back from the highs reached in the final part of last week on what looks like profit-taking from extreme levels rather than a change in fundamentals as we haven’t got any meaningful catalyst to trigger a reversal yet. Looking at the other markets, it’s been mostly boring rangebound price action as traders await new developments on the US-Iran front. Oil prices eased from the Monday highs but the path of least resistance remains to the upside.

In the American session, we only have the weekly US ADP jobs data which hasn’t been a market-moving report for a long time now. Despite the very weak NFP report, all the other labour market data, including the ADP, have been pointing to stabilisation. The NFP might have been just a blip, but if we start to see deterioration in other data as well, then the Fed will have to take a hard decision because both the mandates will be in tension.

This article was written by Giuseppe Dellamotta at investinglive.com.