EMEA Morning Briefing: Brent Returns Above $100

MARKET WRAPS

 Watch For: 

 No major economic updates expected; trading updates for Bayerische Motoren Werke, Assicurazioni Generali, Deutsche Bank, RWE, Hannover Re, Standard Bank Group, Halma, Informa, Zalando, M&G, 

 Opening Call: 

 European stock futures were lower after Asia stocks fell. U.S. Treasurys ticked higher, the dollar strengthened. Gold fell and oil rose. 

 Equities: 

 European futures were lower as the ongoing conflict in the Middle East continued to drive up oil prices and stoke inflation fears. 

 "Historically, a doubling of the oil price coincides with a global recession," said Matt Gertken, chief geopolitical strategist at BCA Research. "In today's terms, that is $120-$140 a barrel. Brent crude brushed the bottom of that range earlier this week." 

 The reason for market complacency is well known, he said. Since Trump's "Liberation Day" in April last year, investors have assumed they could ignore the president's obstreperous tactics because he would presumably reverse course when the going got tough. 

 "They're learning otherwise," Gertken said. "Iran faces a risk to regime survival and is not playing along with Trump's signature 'Art of the Deal' - at least not right away." 

 Forex: 

 The euro is at risk of falling further against the dollar if the recent rise in energy prices is sustained, said Rabobank's Jane Foley in a note. 

 The U.S. real effective exchange rate has retained a positive correlation with energy prices since 2022, when Russia invaded Ukraine, given America's position as a net oil exporter. 

 This suggests higher for longer oil prices would support the dollar, she said. 

 "In contrast, the euro could come under pressure from the eurozone's position as a net energy importer," she said. 

 Bonds: 

 The yield on U.S. Treasurys rose. 

 Volatility in crude oil is the "story of the day" and driving price action across asset classes, said InTouch Capital Markets' analysts team in commentary. 

 Yields have surged again throughout the developed markets, the team said. 

 "Renewed inflation shock from the Iran conflict seems to be already complicating the global policy cycle, particularly if energy prices drive inflation expectations higher and force [central banks] to tighten, " the team added. 

 Energy: 

 Goldman Sachs expects a longer disruption of oil flow through the Strait of Hormuz. It now assumes 21 days of low Strait of Hormuz oil flows at 10% of normal levels versus a previous estimate of 10 days, its analysts said in a research note. 

 Daily oil prices could exceed the 2008 peak if the Strait flows were to remain depressed through March, they said. 

 Oil prices are likely to trend higher until the market gains confidence a lengthy disruption is unlikely, they note. 

 GS expects 4Q Brent and WTI averages in a 30-day disruption scenario to be $76 and $72 a barrel, respectively, and $93 and $89 a barrel, respectively, in a scenario of 60-day disruption. 

 Metals: 

 Gold fell as the surge in oil prices has pushed up inflation expectations and lifted Treasury yields, which could continue to weigh on gold, said DHF Capital's Bas Kooijman in an email. 

 Persistent inflation could reduce expectations for Fed rate cuts, with forecasts currently pointing to only one rate reduction later this year, said the CEO and asset manager. 

 Higher Treasury yields tend to undermine the appeal of the non-interest-bearing precious metal. 

 - 

 Iron ore rose as prices were supported by spot supply concerns amid Middle East tensions, according to Nanhua Futures analysts in a research note. 

 However, demand has been weak as inventories at steel factories build up, they said. Prices are likely to be supported in the near term, but the upside is limited, they added. 

 TODAY'S TOP HEADLINES 

 Trump Targets Industrial Subsidies and Forced Labor in Tariff Probes 

 WASHINGTON-The Trump administration announced new tariff investigations targeting excess industrial capacity and forced-labor regulations that could result in higher levies on scores of nations. 

 The investigations are being initiated under Section 301 of the Trade Act of 1974, which allows the president to levy tariffs against nations that discriminate against U.S. companies or commerce. The probes, run by the U.S. Trade Representative's office, will require the U.S. to consult with foreign governments and provide hearings and opportunities for comment before levies can be imposed. 

 Why the IEA's largest-ever release of oil reserves is pushing up crude prices 

 The largest-ever release of oil from the International Energy Agency's emergency stockpiles lifted prices for the commodity up by nearly 5% on Wednesday. 

 It would seemingly make more sense if prices fell, given that more oil is set to hit the market. Yet traders see the emergency release during the Iran conflict as insufficient to cover the virtual halt of oil flow through of the Strait of Hormuz, as well as production shutdowns in the Persian Gulf and crude storage shortages. 

 Escalating Hormuz Crisis Raises Specter of Prolonged Closure 

 Escalating Iranian attacks and the U.S. government's decision to hold off on military escorts for oil tankers through the Strait of Hormuz are raising the prospect of a prolonged closure that would choke off exports through the world's most important energy-transport route. 

 On Wednesday, the Islamic Revolutionary Guard Corps struck three cargo ships attempting to transit the waterway, the only sea route out of the Persian Gulf. It warned that any other vessels trying to move through the strait also would be targeted. 

 Salesforce makes a big splash in the debt market so it can quickly buy back 14% of its stock 

 Salesforce's plan to pour up to $50 billion into stock buybacks was already controversial as analysts assessed whether that money would be better spent elsewhere. And now the software giant has announced it will take on $25 billion in debt to help finance those repurchases. 

 The company said on Wednesday that it's priced $25 billion worth of senior notes, with the intention of using "all of the net proceeds" to buy back stock. Salesforce CRM disclosed that it has struck agreements with several financial institutions to conduct accelerated share repurchases amounting to $25 billion following the debt offering. 

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 Expected Major Events for Thursday 

 00:01/UK: Feb RICS Residential Market Survey 

 07:00/FIN: Jan Foreign trade 

 07:00/ROM: Jan International trade 

 07:00/TUR: Jan Balance of Payments 

 07:00/SWE: Feb CPI 

 08:00/CZE: Jan Industry, Construction 

 08:00/CZE: Jan Retail trade 

 08:00/SVK: Jan Employment and average monthly wage in selected branches 

 08:00/SVK: Jan Turnover in selected branches of economy, incl Industry & Construction 

 09:00/BUL: Jan Trade with third countries - preliminary data 

 09:00/BUL: Dec Trade with EU Member States - preliminary data 

 09:00/ITA: 4Q Labour Cost Index 

 09:00/FRA: Mar IEA Oil Market Report 

 09:30/UK: 4Q Business Finance Review 

 09:30/GER: ifo Economic Forecast 

 10:00/MLT: Jan International Trade 

 10:00/CYP: Jan Foreign Trade (provisional) 

 11:00/TUR: Turkish interest rate decision 

 11:00/POR: Jan International trade statistics 

 11:00/FRA: Jan OECD Harmonised Unemployment Rates 

 11:00/IRL: Feb CPI 

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 This article is a text version of a Wall Street Journal newsletter published earlier today. 

(END) Dow Jones Newswires

March 12, 2026 01:15 ET (05:15 GMT)

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