Asian stocks fall with focus on Trump’s 48-hour deadline to Iran to reopen Strait of Hormuz

Asia Market Update: Asian stocks fall with focus on Trump’s 48-hour deadline to Iran to reopen Strait of Hormuz by Mon eve ET; Concerns of widening escalation.

General trend and developments

-Asian stocks fell heavily from the open, with the Kospi at its worst -6% and the Nikkei -4.8% (Nikkei on catch up following Friday’s holiday). CN/HK stocks also down significantly, as well as the ASX in Australia.

-Pres Trump gave Iran a 48-hour ultimatum on Saturday night (ET) to fully open the Strait of Hormuz or the US will "obliterate their various power plants". The Truth Social post was made on Sat at 19:44pm ET, which takes the 48-hour deadline to 19:44pm ET on Monday, when FUTs for oil and stocks are open for Asian trading on Tuesday morning.

- Iranian officials have vowed to retaliate by “completely closing” the Strait of Hormuz and striking “companies with US shares” and energy facilities in countries that host US bases will be “completely destroyed”.

-In a further sign of impacted Middle East oil production, Iraq says the Basra oil production has dropped to 900K bpd due to export blockade (down from 3.3M bpd prior to the Iran conflict).

-Regional powerhouses Saudi Arabia, Turkey and other Gulf nations, said that they have issued their “last warnings” to Iran and may be forced to retaliate.

-Europeans had their weekend espressos interrupted by the rude news that Iran had launched long-range missiles towards UK’s Diego Garcia air base in the Indian Ocean. A distance of ~4,000km, which puts most of Europe’s capitals, including London, within range. These longer-range missiles require technologies that Iran claimed for years they did not have. One of the missiles failed, but the other had to be intercepted by a US Navy destroyer. Several European nations now considering sending ships to assist trade shipping transit through the Strait of Hormuz.

-Today, Israel and the US stepped attacks on Tehran, with wide-scale waves of attacks.

-EM currencies down heavily today on a strong US dollar, continuing last week’s trend. Thailand and Taiwan currencies lowest since May/June last year, while Korea Won lowest since 2009 while India Rupee also at fresh record low.

-Takaichi’s govt continues to successfully walk a fine tight-rope, building on its deepening ties with the US during the PM’s visit to Pres Trump in DC last week, while her diplomats appear to have leveraged cautious words from the PM about “the legality” of the Iran conflict into Iran potentially allowing Japanese ships to transit through the Straits of Hormuz, joining China, India, Pakistan, Turkey, Iraq and Malaysia. {Note reports indicating that Iran now imposing safe-passage transit fees as high as $2M per vessel].

-Pres Lee of South Korea nominated “banker’s banker” Shin Hyun-song as next Bank of Korea (BOK) Governor, to replace incumbent Gov Rhee when his four-year terms expires on Apr 20th. Shin heads research at the BIS and has been an advisory member at the Federal Reserve Bank of New York since 2007.

-Thus far, analysts have generally characterized the new Bank of Korea (BOK) Gov nominee Shin Hyun-song as ‘hawkish.’ The FX-related views of the nominee will also be of interest.

- Meanwhile, there have been no significant improvements seen in South Korea’s LNG and naphtha supply situations, as the government remains mum on options regarding the Strait of Hormuz. This could potentially impact other fuel importers in Asia, including Australia.

-Aussie gold miner, St Barbara [SBM.AU] noted its Simberi operations receive fuel from various refineries in Asia, including Singapore, Malaysia, South Korea and Japan. The Simberi Operations currently use approximately 65,000 litres per day of diesel for the mining fleet and power generation. Hence, leaders in ANZ are continuing to move to shore up fuel supplies, including jet fuel.

-New Zealand’s government faces additional pressure after Friday’s sovereign outlook cut by Fitch. citing delayed fiscal consolidation and higher debt trajectory.

-Taiwan saw another month of sterling export orders in Feb, driven by AI demand, with the notable increases being orders from the US, (+24% y/y) and from Japan, +18% y/y). [Note: GDP for 2026 expected 7.3-8.0%, exceptional for an advanced economy].

-Peak of HK/CN FY25 earnings continues this week, highlighted by Xiaomi, the big CN banks, China Mobile, China Telecom, CNOOC, Meituan and others.

-US equity FUTs -0.3% to -0.5% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

-Tue Mar 24th JP Feb CPI, Global Mar PMIs.

-Wed Mar 25th AU Feb CPI, US Q4 Current Account.

-Thu Mar 26th SG Feb Industrial Production.

-Fri Mar 27th UK Feb Retail Sales.

Holidays in Asia this week

-Mon Mar 23rd Indonesia.

-Tue Mar 24th Indonesia.

-Thu Mar 26th India.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 opens -1.9% at 8,268.

- (AU) Australia PM Albanese: Singapore, Australia to speed up talks on 'essential supplies' including diesel, LNG - joint statement.

- (AU) Australia 3-D printer firm AML3D may seek third US site on Navy demand – US financial press.

- (NZ) Fitch affirms New Zealand sovereign rating at 'AA+'; Cuts outlook to negative; Revision due to delayed fiscal consolidation and higher debt trajectory [weekend update].

- (NZ) New Zealand combined fuel stocks had fallen to 47 days as of Mar 18th - financial press.

- (NZ) New Zealand Govt: To temporarily allow fuel meeting Australian standards to be supplied domestically for up to 12 months.

China/Hong Kong

- (CN) Shanghai Composite opens -1.3% at 3,904; (HK) Hang Seng opens -1.9% at 24,789.

- (CN) China PBOC Gov Pan Gongsheng: Reiterates will continue to implement appropriately loose monetary policy - comments at China Development Forum [weekend update].

- (CN) China Feb YTD Inbound Foreign Direct Investment [FDI] (CNY) Y/Y: -5.7% v -5.7% prior [weekend update].

- (CN) China said to issue overseas lending measures for local companies - press [weekend update].

- (CN) On Fri, China official said a Fitch executive ‘discussed sovereign credit rating’ – US financial press [update].

- (CN) SCMP: China forex in focus amid yuan global push [inline].

- (CN) Nanjing local govt further encourages housing consumption with 'trade-in' subsidy totaling RMB100M.

- (HK) HKMA: China PBOC to issue Yuan denominated bills in Hong Kong.

- (CN) China PBOC sets Yuan reference rate: 6.9041 v 6.8898 prior.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY8B in 7-day Reverse Repos; Net drains CNY129B v drains CNY17B prior.

Japan

- (JP) Nikkei 225 opens -1.7% at 52,469.

- (JP) Iran Foreign Min Araghchi says ready to allow Japanese vessels pass through the Strait of Hormuz; Iran has started talks with Japan about possible opening of the Strait - Kyodo news interview [weekend update].

- (JP) Softbank: Announces launch of the "Portsmouth Consortium" under the US-Japan Strategic Trade and Investment agreement as well as companies who may participate [weekend update].

- (JP) Japan TSE Growth 250 FUTs circuit breaker triggered - financial press.

- (JP) Japan Top FX Diplomat Mimura: Will do utmost to respond to FX as needed.

- (JP) Japan to spend ~¥800B from budget reserves to curb gasoline prices - NHK.

- (JP) Japan said to be considering reducing the amount of buybacks for inflation-linked government bonds - financial press.

- (JP) Asada and Sato confirmed for BOJ board positions (as expected).

- (JP) Takaichi cabinet approval rises +3.2ppts to 65.2% - ANN poll.

- (JP) Japan Chief Cabinet Sec Kihara: Japan did Not make specific commitments to US on Hormuz.

Korea

- (KR) Kospi opens -3.5% at 5,580.

- (KR) Korea Pres Lee selects Shin Hyun-song as nominee for next Bank of Korea (BOK) Governor - Korea Times [weekend update].

- (KR) Korea Exchange sidecar activated as Kospi program trading falls -5%, halted for 20 minutes.

- (KR) South Korea Won weakens past 1,510 per USD.

- (KR) South Korea ruling party spokesperson: To draft extra budget ~KRW25T (prior est ~KRW20T) [weekend update].

- (KR) South Korea 10-year Bond FUTs trade at the lowest level since Nov 2023 – US financial press.

- (KR) Bank of Korea: South Korea Feb foreign currency deposits fall for 2nd straight month – financial press [update].

- (KR) South Korea Mar Exports 1-20 Days Y/Y: 50.4% v 23.5% prior; Imports Y/Y: 19.7% v 11.7% prior.

- (KR) South Korea prosecutors search SK Energy, S-Oil, GS Caltex - Yonhap.

- (KR) South Korea Daehan Shipbuilding wins order worth KRW133.8B for crude oil carrier - US financial press.

- (KR) South Korea govt said to deny media reports on Korea's Security Chief "plan to visit US" - press.

Other Asia

- (TW) Taiwan Feb Export Orders Y/Y: 23.8% V 24.5%e [weekend update].

- (TH) Thailand Baht (THB) weakens to 33.08, lowest since May 20th, 2025.

- (TH) Thailand Commerce Ministry: To submit written comments to US on Section 301 trade investigation by Apr 15th.

- (TH) Thailand's TFEX: Announces temporary trading halt of silver online FUTs.

- (IN) INR currency (Rupee) hits fresh record low against the USD above 93.835 - dealers.

- (IN) Follow Up: On early Monday, India national said to have suffered a minor injury in the UAE Abu Dhabi after debris related to a ballistic missile fell in the Al Shawamekh area following successful interception – Press [update].

- (MY) Malaysia fuel subsidy bill has risen to $811M amid Iran war; the fuel subsidy bill has risen more than fourfold in under 1 week – SCMP.

- (PH) Philippines Feb Overall Balance of Payments (BoP): -$2.3B v -$0.4B prior [weekend update].

- (ID) Japan said to offer stealth frigates to Indonesia ahead of PM Takaichi - Pres Prabowo meeting - SCMP.

North America

- (US) Trump gives Iran 48 hours to fully open the Strait of Hormuz or the US will "obliterate their various power plants" - Truth Social post at 19:44ET on Saturday [weekend update].

- (US) Pres Trump: On Monday, ICE will be going to airports to help our wonderful TSA Agents who have stayed on the job - post on Truth Social [weekend update].

- (US) Pentagon to adopt Palantir AI as a core US military system - press citing memo [weekend update].

- (US) WorldACD Weekly Air Cargo Trends (week 11): Rates continue rising amid partial recovery of Gulf capacity.
Rates continue rising amid partial recovery of Gulf capacity [weekend update].

- (US) United Airlines CEO: Our plans assume oil goes to $175/bbl and does not get back down to $100/bbl until the end of 2027 - press [weekend update].

- (US) Pres. Trump: PEACE THROUGH STRENGTH, TO PUT IT MILDLY!!! - Truth Social post.

- (US) Pres. Trump: I don’t think we should make any deal with the Crazy, Country Destroying, Radical Left Democrats until SAVE America Act is passed - post on Truth Social.

- (US) Treasury Sec Scott Bessent said Washington may have to ‘escalate to de-escalate’ against Iran - press [update].

- (US) Analysts continue to revise up oil price forecasts amid the persisting and uncertain Iran war: Goldman Sachs analysts now expect 2026 averages for Brent Crude oil of $85 (vs. $77 prior) and $79 for WTI (vs. $72).

- (US) La Guardia airport (NYC) temporarily closed [no reason cited].

- (US) Fed Chair Powell accepted Paul Vocker award at American Society for Public Administration Annual Conference - financial press [weekend update from Mar 21st].

Europe

- (UK) UK Prime Minster Office: Starmer, Trump discussed need to reopen Strait of Hormuz.

- (UK) Met Police: Investigation launched after arson attack on four Jewish community ambulances in Golders Green, London.

- (FR) France right-wing party, Le Pen's Rassemblement National, falls short of big wins expected in local election races – US financial press [update].

- (RU) Russia Official: Fuel tank damaged in attack on Russia's Primorsk Port.

Middle East

- (IR) Follow up: Iran IRGC: If Trump executes threats to target Iran's energy facilities, Strait of Hormuz will be "completely closed" - statement [weekend update].

-(IL) IDF statement: Iran launched a long-range missile for the first time since the start of Operation Roaring Lion that could reach a distance of ~4,000 km. [weekend update].

-(IQ) Iraqi govt official says Basra oil production has dropped to 900K bpd due to export blockade (down from 3.3M bpd prior to the Iran conflict) [weekend update].

-(SA) Saudi Arabia and UAE said to inch closer to supporting US-Israeli war; Saudi Arabia agreed to open King Fahd Air Base in Taif, in Western Saudi Arabia, to the Americans - Middle East Eye [weekend update].

-(TR) Turkey Foreign Min Fidan: Gulf countries have issued their “last warnings” to Iran and may be forced to retaliate if the attacks continue [weekend update].

- (IR) Reportedly at least one killed in air strike on radio station in Iran's Gulf Port of Bandar Abbas - Semi-official Mehr News Agency.

- (IR) Explosions heard in several parts of Iran's capital Tehran - state-run Mizan news agency.

- (IR) Follow up: Iran IRGC: We are determined to respond to any threat at same level as it creates in terms of deterrence - statement.

- (IL) Iranian missiles breached Israeli defenses and hit two communities near Israel's main nuclear research center in the southern part of the country; Nearly 100 people injured - press [weekend update].

- (IL) Israeli Military: It has begun a wide-scale wave of strikes targeting Iranian infrastructure in Tehran.

- (SA) Saudi Defense Ministry: Two ballistic missiles launched towards Riyadh, one missile was intercepted while the other fell in unhabited area.

- (UAE) UAE: Defenses responding to missile, drone threats from Iran.

Levels as of 01:20 ET

Nikkei 225 -3.5%; ASX 200 -0.7%; Hang Seng -3.4%; Shanghai Composite -3.0%; Kospi -6.0%;.

Equity S&P500 Futures -0.3%; Nasdaq100 -0.5%; DAX -2.0%; FTSE100 -1.4%.

EUR 1.1565-1.1536; JPY 159.62-159.02; AUD 0.7024-0.6970; NZD 0.5839-0.5805.

Gold -2.9% at $4,360/oz; BTC -0.6% at $68,750, Crude Oil +0.7% at $98.92/bbl; Copper -1.2% at $5.3090/lb.