Global stock markets see sharp falls

Chris Beauchamp IG

"Stock markets drop sharply as escalation in the Middle East worsens the global economic outlook", says Axel Rudolph, Chief Technical Analyst at investing and trading platform IG.

Stocks sharply lower

Monday's relatively muted reaction to the Middle East conflict across US equity markets gave way to sharp selling on Tuesday as the situation escalated. Several global indices have seen drops akin to April 2025, some hitting year-to-date lows amid growth concerns. Rebounding euro area inflation and Japan's jobless rate hitting 1 1/2-year highs didn't help either. In the UK yields jumped as markets scaled back on Bank of England rate cut expectations for March.

Oil and gas prices surge continues

European natural gas futures surged nearly 40% to above €60/MWh - their highest level since 2023 - following a prior 35% jump, as escalating Middle East tensions raised fears over LNG supply. Iranian drone strikes on key infrastructure and the de facto closure of the Strait of Hormuz, constraining broader regional exports, also led to another 8% rise in the oil price this week with Brent crude rallying to $84 per barrel. Gold and silver prices saw sharp falls of 5% and 10% respectively as a stronger US dollar, rising inflation concerns and investors keen for liquidity curbed demand for safe-haven assets.

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Chris Beauchamp

EUR/USD retreats toward 1.1600 after upbeat US data

EUR/USD pulls away from session highs and declines toward 1.1600 in the American session on Wednesday. Upbeat private sector employment and ISM Services PMI data from the US help the US Dollar (USD) stay resilient against its rivals, limiting the pair's upside.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery struggles to gather momentum as the Greenback benefits from better-than-forecast macroeconomic data releases.

Gold loses traction after testing $5,200

Gold corrects lower after testing $5,200 but manages to stay in positive territory in the second hald of the day on Wednesday. The precious metal remains well supported by the deterioration of the geopolitical scenario in the Middle East, while the US Dollar's resilience caps the upside.