Heavy cluster of interest rate decisions next week

EU mid-market update: Time is running out for clear plan to end Iran war, before energy/chemical disruption becomes entrenched; Oil >$100/bbl despite IEA reserve release; Heavy cluster of interest rate decisions.

Notes/observations

- Little change to negative geopolitical backdrop meant Europe opened lower once again, except for Norway (helped by oil-driven economy). Risk sentiment attempting to stabilize but not managing a recovery. Prolonged disruption from extended Iran war horizon weighing on disruption for Strait of Hormuz and global energy. Europe particularly by LNG. US moved to ease supply pressure, including allowing Russian oil cargoes already at sea and reports of a temporary Jones Act exemption.

- President Trump informed G7 leaders that Iran is "about to surrender," claiming the regime's military and leadership are so thoroughly decimated that there is effectively no one left to even announce the defeat. While international allies are urgently calling for an end to the conflict to secure the Strait of Hormuz, Trump dismissed critical media coverage and insisted the U.S. has both the "unlimited ammunition" and the time to finish the job. He framed the war as a historic cleanup, noting the poetic timing of the 47th President finally dismantling a 47-year-old "terrorist regime." Polymarket bets now price chance of US-Iran ceasefire by summer at 52% v 75% on Monday.

- Ahead of plethora of rate decisions next week and expected energy-driven inflation shock, Fed funds futures now price less than 25bps of easing this year, with a 46% probability of no Fed cuts. For Europe, markets have shifted from pricing cuts to hikes, with a full ECB increase priced by July and a 70% chance of another by year-end.

- Earlier this morning saw release of UK Monthly GDP for Jan, missing 0.2% estimate and coming in flat. Economists warn the energy shock risks pushing the UK toward stagflation, forcing the Bank of England to keep policy tighter for longer despite weakening activity.

- German chemical powerhouse VCI noted that global supply chains fracturing and the shadow of the Iran conflict looming, the very lifeblood of production—raw materials—teeters on the edge of a crippling bottleneck. Strategic planning has become a ghost of the past as the industry faces a terrifying reality: the longer the fires of war burn, the deeper the scars on the global economy. Abandoning all forecasts for 2026, the VCI warns that the sector is now locked in a desperate struggle against mounting disruptions that threaten to dismantle the backbone of German manufacturing.

- Bernstein analysts report that the semiconductor industry is currently safe from Middle East-related helium shortages, despite Qatar supplying a massive 36% of the world's output. While helium is an essential chipmaking ingredient with no real substitute, major players like TSMC and SK Hynix have likely managed to buffer the risk with solid inventories and mitigation plans. Essentially, the supply chain might be tight, but the industry isn't holding its breath just yet.

- Meta said to have delayed the rollout of its "Avocado" frontier model until at least May 2026 after internal testing revealed it trailing behind rivals in reasoning, coding, and writing. The performance gap is significant enough that leadership has reportedly discussed the once-unthinkable move of temporarily licensing Google’s Gemini to keep their current AI products competitive. This setback highlights the immense pressure on Meta’s AI division to deliver a generational leap despite their massive multibillion-dollar investments this year.

- Next week, Nvidia’s primary goal at GTC is to move beyond single-chip hype by detailing a concrete system roadmap that spans from the Rubin platform in 2026 to the Feynman architecture in 2028. This strategy embraces a "disaggregated" inference model, featuring specialized hardware like a Groq-derived decode coprocessor and a strategic x86 CPU collaboration with Intel to manage the entire AI rack. To support this massive scale, the company is prioritizing megawatt-class infrastructure and photonic networking while formally folding quantum computing into its long-term architectural vision.

- Asia closed lower with KOSPI underperforming -1.7%. EU indices -0.4% to -0.8%. US futures -0.1%. Gold +0.3%, DXY +0.4%; Commodity: Brent +1.0%, WTI +0.5%; Crypto: BTC +2.7%, ETH +2.4%.

Asia

- New Zealand Feb Manufacturing PMI: 55.0 v 55.1 prior

- Japan Fin Min Katayama: In ‘closer’ contact with US authorities on FX, communicating with the US 'more than usual'.

Global conflict/tensions

- Iran Supreme Leader Mojtaba Khamenei issued his first statement via state media. Not done in person but via a readout which fueled continued market speculation that he might have been incapacitated by earlier US/Israeli strikes. Iran leaders stated that believe in friendship with its neighbors but would continue to target US military bases in neighboring countries, called for all those bases in the region to be immediately closed.

- Pres. Trump posted that the US was totally destroying the terrorist regime of Iran, militarily economically... Watch what happens to these deranged scumbags today.

Americas

- Brazil Pres Lula: Oil prices are getting out of control, which means higher international fuel prices; Signs decree scrapping PIS, CONFINS taxes levied on diesel; Expects State Govs to reduce ICMs tax by a little.

Trade

- China MOFCOM responded to US 301 probe: US 301 tariffs violate WTO rules [Note: No counter-measures noted in response].

- USTR announced to begin 60 section 301 investigation relations to failures related to forced labor; the countries include China, EU and the UK.

- US formally commenced investigations into 16 trading partners as it sought more legally sound avenues to impose tariffs to replace the IEEPA 'reciprocal' and fentanyl-related tariffs struck down by the Supreme Court.

- USTR Greer to travel with Treas Sec Bessent for his meeting with China Vice Premier He Lifeng in Paris (March 15-16th).

Energy

- US Treasury announcement that it would lift sanctions on Russian petroleum products immediately, through April 11th.

- Iran Deputy FM: Iran is not laying mines in Strait of Hormuz; Iran allowed some ships to cross the Strait.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.41% at 596.38, FTSE -0.39% at 10,267.64, DAX -0.59% at 23,434.29, CAC-40 -0.74% at 7,925.75, IBEX-35 -0.76% at 17,009.73, FTSE MIB -0.37% at 44,289.50, SMI -0.26% at 12,807.80, S&P 500 Futures -0.01%].

Market Focal Points/Key Themes: European indices open lower across the board and remained under pressure through the early part of the session; rising oil prices weighing on European equities; all sectors start the day in the red; less negative sectors include real estate and energy; sectors leading the way lower include materials and financials; BESI reportedly receives takeover interest, refuses to respond to rumor; Vivendi to acquire luxury division for Prisma Media; reportedly Glencore trying to revive Rio Tinto talks; focus on US PCE price index coming out later in the day; no major earnings expected in the upcoming Americas session.

Equities

- Financials: Berkeley [BKG.UK] -3.0% (trading update).

- Healthcare: Qiagen [QIA.DE] +1.0% (analyst upgrade).

- Technology: ASML [ASML.NL] +0.5% (Bernstein analysts: There is currently “little or no risk” to semiconductor companies stemming from a possible helium shortage due to the impact of war in the Middle East), BE Semiconductor [BESI.NL] +10.5% (said to be working with Morgan Stanley after receiving takeover interest).

- Materials: Glencore [GLEN.UK] -1.5% (CEO hopes to revive Rio Tinto talks as coal prices rise).

- Telecom: Vivendi [VIV.FR] -3.5% (earnings).

Speakers

- EU Commission Statement: Gas storage filling levels in EU remain stable; Oil stocks at a high level.

- Germany Econ Min Reiche: IEA oil release has not had desired effect because attacks on ships continue. Worried that Russian oil sales to aid Putin's war in Ukraine.

- UK Chancellor Reeves reportedly to meet with petrol forecourt operators this week.

- German Chemical Industry Association (VCI) noted it would not provide any 2026 forecast. There were initial indications of disruptions to supply chain; Iran conflict raised concerns on serious bottlenecks for raw materials; The longer the war lasted, the more severe the consequences.

- Russia Central Bank (CBR) official: Monetary policy should remain tight.

- Japan PM Takaichi stated in Parliament that there was no plans to raise the consumption tax (currently at 10%).

- India reportedly to hold off on US trade deal for several months.

- South Korea Fin Min Koo reiterated stance of watching KRW currency volatility and was ready with policy tools; Working on extra budget to support groups hit by oil shock. Still targeting 2026 GDP growth of 2.0%.

Currencies/fixed income

- USD maintained its safe-haven tone. Dealers noted the greenback additionally aided Pres. Trump social media post of watch what happens to these deranged scumbags (Iran) on Friday.
Focus turned to the plethora of central bank rate decision that take place next week (16 decisions in total). The conflict in the Mid-East ramping Polymarket bets now price chance of US-Iran ceasefire by May 31st at 52% v 75% on Monday.

- EUR/USD below the pivotal 1.15 support level with dealers noting a weekly close below the pivotal level could ignite downside potential in the pair. Euro unable to benefit from markets recalibrating the ECB rate path and seeing up to two rates hikes in 2026.

- GBP/USD at 1.3270 area as UK Jan GDP growth came in below consensus. Production data was also disappointing for the UK.

- USD/JPY probing the key 160 psychological resistance. Japanese officials continued their verbal intervention with little/none effect to help strengthen the yen currency. Some dealers note that Japan MOF could surprise the market with FX intervention during the upcoming week when markets are distracted by keyt rate decisions (including the BOJ, Fed).

Economic data

- (FI) Finland Feb CPI M/M: +1.1% v -0.2% prior; Y/Y: +0.6 v -0.2% prior.

- (DE) Germany Feb Wholesale Price Index M/M:0.6% v 0.9% prior; Y/Y: 1.2% v 1.2% prior.

- (UK) Jan Monthly GDP M/M: 0.0% v 0.2%e; 3M/3M: 0.2% v 0.3%e.

- (UK) Jan Industrial Production M/M: -0.1% v +0.2%e; Y/Y: 0.4% v 0.6%e.

- (UK) Jan Manufacturing Production M/M: 0.1% v 0.2%e; Y/Y: 1.3% v 1.5%e.

- (UK) Jan Construction Output M/M: 0.2% v 0.0%e; Y/Y: %-0.2 v -0.1%e.

- (UK) Jan Index of Services M/M: 0.0% v 0.2%e; 3M/3M: 0.2% v 0.3%e.

- (UK) Jan Visible Trade Balance: -£14.5B v -£22.2Be; Overall Trade Balance: -£3.9B v -£3.9Be.

- (SE) Sweden Feb Unemployment Rate: 8.8% v 8.6% prior; Unemployment Rate (seasonally adj): 8.4% v 8.4%e; Trend Unemployment Rate: 8.5% v 8.6% prior.

- (RO) Romania Feb CPI M/M: 0.5% v 0.5%e; Y/Y: 9.3% v 9.3%e.

- (TR) Turkey Mar Expected Inflation Next 12 Months: 22.2% v 22.1% prior.

- (CN) Weekly Shanghai Deliverable Copper Inventories (SHFE): 433.5K v 425.2K tons prior.

- (TH) Thailand May Foreign Reserves w/e Mar 6th: $288.3B v $293.9B prior.

- (FR) France Feb Final CPI M/M: 0.6% v 0.7% prelim; Y/Y: 0.9% v 1.0% prelim.

- (FR) France Feb Final CPI EU Harmonized M/M: 0.7% v 0.8% prelim; Y/Y: 1.1%e v 1.1% prelim; CPI (ex-tobacco) Index: 100.20 v 100.30e.

- (ES) Spain Feb Final CPI M/M: 0.4% v 0.4% prelim; Y/Y: 2.3% v 2.3% prelim.

- (ES) Spain Feb Final CPI EU Harmonized M/M: 0.4% v 0.4% prelim; Y/Y: 2.5% v 2.5% prelim.

- (ES) Spain Feb CPI Core M/M:+0.4 % v -0.6% prior; Y/Y (final): % v 2.7% prelim.

- (RU) Russia Narrow Money Supply w/e Mar 6th (RUB):19.81 T v 19.63T prior.

- (HK) Hong Kong Q4 Industrial Production Y/Y: 5.7% v 5.3% prior.

- (HK) Hong Kong Q4 PPI Y/Y: 9.5% v 7.7% prior.

- (IT) Italy Jan Industrial Production M/M: -0.6% v +0.4%e; Y/Y: -0.6% v _0.8%e; Industrial Production NSA (unadj) Y/Y: -3.6% v +2.8% prior.

- (PL) Poland Feb CPI M/M: 0.3% v 0.3%e; Y/Y: 2.1% v 2.1%e.

- (CN) China Feb YTD New Yuan Loans (CNY): 5.61T v 5.576Te.

- (CN) China Feb YTD Aggregate Financing (CNY): 9.60T v 9.245Te.

- (CN) China Feb M2 Money Supply Y/Y: 9.0% v 8.9%e; M1 Money Supply Y/Y: 5.9% v 5.1%e; M0 Money Supply Y/Y: 14.1% v 2.7% prior.

- (UK) Feb BoE/Ipsos Inflation Attitude Survey (Next 12 months): 3.2% v 3.5% prior.

Fixed income issuance

- (ZA) South Africa sold total ZAR280M vs. ZAR1.0B indicated in I/L bonds.

Looking ahead

- (DE) Germany Jan Current Account Balance: No est v €16.1B prior.

- 06:00 (EU) Euro Zone Jan Industrial Production M/M: +0.6%e v -1.4% prior; Y/Y: 1.3%e v 1.2% prior.

- 06:00 (EU) Daily Euribor Fixing.

- 06:00 (FR) France Debt Agency (AFT) announcements on upcoming issuance.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 07:00 (UK) DMO to sell £6.5B in 1-month, 3-month and 6-month bills (£1.5B, £2.5B and £2.5B respectively).

- 07:30 (IN) India Forex Reserve w/e Mar 6th: No est v $728.5B prior.

- 08:00 (BR) Brazil Jan IBGE Services Volume M/M: 0.1%e v -0.4% prior; Y/Y: 2.8%e v 3.4% prior.

- 08:00 (MX) Mexico Jan Industrial Production M/M: 0.1%e v 0.2% prior; Y/Y: 1.6%e v 2.4% prior; Manufacturing Production Y/Y: -0.2%e v +1.3% prior.

- 08:30 (US) Q4 Preliminary GDP Annualized (2nd reading) Q/Q: 1.4%e v 1.4% advance; Personal Consumption: 2.4%e v 2.4% advance.

- 08:30 (US) Q4 Preliminary GDP Price Index: 3.6%e v 3.6% advance; Core PCE Price Index: 2.7%e v 2.7% advance.

- 08:30 (US) Jan Personal Income: 0.5%e v 0.3% prior; Personal Spending: 0.3%e v 0.4% prior; Real Personal Spending (PCE): 0.0%e v 0.1% prior.

- 08:30 (US) Jan PCE Price Index M/M: 0.3%e v 0.4% prior; Y/Y: 2.9%e v 2.9% prior.

- 08:30 (US) Jan Core PCE Price Index: 0.4%e v 0.4% prior; Y/Y: 3.1%e v 3.0% prior.

- 08:30 (US) Jan Preliminary Durable Goods Orders:: +1.1%e v -1.4% prior; Durables (ex-transportation): 0.3%e v 1.0% prior; Capital Goods Orders (non-defense/ex-aircraft): 0.5%e v 0.8% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.4%e v 1.0% prior.

- 08:30 (CA) Canada Feb Net Change in Employment: +10.0Ke v -24.8K prior; Unemployment Rate: 6.6%e v 6.5% prior; Full Time Employment Change: 6.6%e v +44.9K prior; Part Time Employment Change: No est v -69.7K prior; Participation Rate: No est v 65.0% prior; Hourly Wage Rate: 3.2%e v 3.3% prior.

- 08:30 (CA) Canada Jan Manufacturing Sales M/M: -3.3%e v +0.6% prior.

- 08:30 (CA) Canada Q4 Capacity Utilization Rate: 78.4%e v 78.5% prior.

- 09:00 (RU) Russia Jan Trade Balance: No est v $10.0B prior; Exports: No est v $43.5B prior; Imports: No est v $33.5B prior.

- 09:00 (RU) Russia Mar Gold and Forex Reserve w/e Mar 7th: No est v $811.1B prior.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 09:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance (if any).

- 09:00 (IN) India announces upcoming bill issuance (held on Wed).

- 10:00 (US) Mar Preliminary University of Michigan Confidence: 54.8e v 56.6 prior.

- 10:00 (US) Jan JOLTS Job Openings: 6.750Me v 6.542M prior.

- 11:00 (EU) Potential sovereign ratings after European close (S&P on Spain; Fitch on Italy, Spain; DBRS on Ireland, Cyprus; Scope on Spain, Netherlands, Austria).

- 12:00 (RU) Russia Feb CPI M/M: 0.5%e v 1.6% prior; Y/Y: 5.7%e v 6.0% prior.

- 12:00 (RU) Russia Feb CPI Core M/M: No est v 0.95% prior; Y/Y: No est v 5.4% prior.

- 13:00 (US) Weekly Baker Hughes Rig Count data.