Market Report.
⚠️ In yesterday’s report, we warned our investor readers to be wary of Trump’s optimistic remarks over the past two days, as they could simply be a ploy to boost the markets with false optimism. Sure enough, in his latest speech, Trump announced no ceasefire or progress in negotiations with Iran, and the stock markets are falling again, oil prices are rising, the dollar is strengthening and US bond yields are rising. Let’s look at the details.
🎙️ On Wednesday night, U.S. President Donald Trump dampened growing investor optimism about a possible end to the Middle East conflict, warning that Washington would strike Iran “extremely hard” within the next two to three weeks.
📉 According to Bloomberg, the war has claimed more than 5,000 lives, the vast majority of them civilians, with nearly three-quarters of the fatalities reported in Iran, based on figures from government sources and the U.S.-based Human Rights Activists News Agency. In Lebanon, where Israel opened a second front against Iran-backed Hezbollah after attacks by the militant group, more than 1,300 people have been killed.
🗳️ Despite the escalating toll, most Americans oppose the conflict, which President Donald Trump and Israeli Prime Minister Benjamin Netanyahu initiated amid ongoing negotiations with Tehran. Trump has offered shifting justifications for the campaign, without presenting public evidence that Iran posed a direct threat to the United States.
📜 Iranian President Masoud Pezeshkian posted a letter to Americans on X on Wednesday. The Letter’s Main Points: Iran is one of the oldest continuous civilizations in history, yet has never chosen the path of aggression or expansion in its modern history. Portraying Iran as a threat is inconsistent with historical reality and present-day facts – it is a manufactured narrative to justify pressure, maintain military dominance, and control strategic markets. The turning point in Iran-US relations was the 1953 US-backed coup that disrupted Iran’s democratic process and sowed deep distrust.
❓ It questions whose interests the US government is truly serving by this war, as Iran had fulfilled its commitments under the nuclear agreement. The letter suggests the US aggression is a proxy for Israel’s interests, diverting attention from its crimes against Palestinians.
🧠 Multiple U.S. intelligence agencies have assessed that the Iranian government is currently disinclined to engage in substantial negotiations to end the U.S.-Israeli war. Iran perceives itself as holding a strong position in the conflict and sees no need to comply with American diplomatic demands, though it remains willing to keep communication channels open.
🚢 Iran has effectively closed the Strait of Hormuz by attacking oil tankers, a major leverage point destabilizing global energy markets. Iran’s leadership has expressed deep mistrust of the Trump administration, with the Iranian President stating the U.S. “does not believe in diplomacy.”
🚫 Iran has denied Trump’s claim that it requested a ceasefire, calling it “false and baseless.” China has called for all parties to begin peace talks, but its support for Iran has been limited to intelligence sharing, with neither Russia nor China expected to enter the conflict directly.
⚔️ President Trump threatened to halt the PURL (Prioritised Ukraine Requirements List) program – NATO’s weapons procurement initiative for Ukraine – unless European allies joined a U.S.-led “coalition of the willing” to reopen the Strait of Hormuz.
🇪🇺 This threat was directed at European NATO members who had rebuffed Washington’s request to deploy warships to the Strait, viewing the Iran war as “not our war”. NATO Secretary General Mark Rutte brokered a compromise, with France, the UK, and Germany issuing a joint statement expressing “readiness to contribute to appropriate efforts” to ensure safe passage through the Strait. This was done hastily after Trump threatened to withdraw from PURL and Ukraine support.
🗣️ President Donald Trump asserted that “NATO is zero without America,” underscoring Washington’s central role in the alliance. In response, Italian Prime Minister Giorgia Meloni reportedly delivered a pointed retort, questioning whether that logic would mean closing U.S. bases, reducing trade ties, or symbolically “storming McDonald’s,” highlighting growing tensions in the transatlantic debate.
🇬🇧 The UK and France have officially rejected Trump’s demand to deploy warships to the Strait. “This is not in our national interest”, said PM Starmer.
🌱 The European Commission is urging immediate lifestyle changes and a rapid transition to renewables to address the severe energy crisis stemming from the conflict in the Gulf region.
🏠 EU Energy Commissioner Dan Jørgensen urged Europeans to work from home, drive and fly less, as the EU faces a prolonged energy crisis due to the conflict in the Gulf. Jørgensen’s speech had echoes of the early days of the COVID-19 pandemic, warning there is no clear end in sight to the current energy crisis.
🚗 He advised member states to follow IEA recommendations like reducing highway speeds, encouraging public transport, and adopting efficient driving practices. The extraordinary meeting of EU energy ministers on Tuesday ended with no concrete proposals, though the Commission promised to announce EU-level measures soon. Discussions included the need for state aid, increased renewables and nuclear power, and support for boosting biofuels to improve energy security.
🌍 Fears are growing that the world faces an energy crisis exceeding even the 1970s oil shock, with global economic ramifications comparable to the COVID-19 pandemic.
💰 According to Bloomberg, the Iranian Revolutionary Guard Corps (IRGC) has established a structured toll system for commercial vessels wishing to transit the Strait of Hormuz. Ship operators must provide detailed information to an IRGC-linked intermediary company, which then undergoes background checks by the IRGC Navy.
🚦 Iran uses a ranking system of 1 to 5 for nations, with “friendly” countries receiving better terms and priority. Once the toll is paid, the IRGC issues a permit code and route instructions. As the ship approaches, it broadcasts the passcode and is escorted through a narrow passage by an Iranian Navy patrol boat.
💵 Tolls start at around $1 per barrel of oil carried, with some voyages reaching up to $2 million per transit. Payments must be settled in Chinese yuan or stablecoins, bypassing the U.S. dollar and American sanctions.
🚢 Iran has offered a parallel route for some vessels to temporarily reflag under Pakistan, after agreeing to allow 20 Pakistani vessels to transit the Strait freely. Iran has partially reopened the Strait specifically to vessels from nations it considers friendly, including Russia, India, Iraq, China, and Pakistan. Ships linked to the U.S., Israel, or their close allies face denial or seizure.
💱 The IRGC’s insistence on yuan and crypto payments is being closely watched as a significant de-dollarization signal, contributing to broader debate over the durability of dollar-denominated energy trade. Iran’s parliament is advancing a bill to institutionalize the Hormuz toll system as part of any postwar settlement.
🤖 The U.S.-Israel-Iran war has become “China’s most valuable AI training dataset” for a live conflict featuring advanced Western military capabilities.
🛰️ The official PLA newsletter Jiefangjun Bao acknowledged that the Chinese military has been using its satellite constellation to systematically monitor U.S. Air Force operations in Iran, with the goal of feeding that data into AI training models.
✈️ The Hangzhou-based defense AI startup Jingan Technology claimed to have tracked four U.S. B-2A Spirit stealth bombers during the March 1 strikes on Iranian missile facilities. Jingan said its “Jingqi” platform intercepted voice communications from the B-2s and reconstructed their flight paths, but later deleted the post, citing a desire to “lower attention”.
📡 Chinese satellite systems are capable of near-continuous surveillance over the theater, tracking troop movements, carrier deployments, aircraft sorties, and base activity. This data is feeding into military-AI programs at organizations like CETC.
🤝 China has been providing Iran with operational support, including access to the BeiDou-3 navigation system, electronic warfare assistance, and satellite intelligence to help complete Iran’s targeting capabilities.
Market View.
📉 Donald Trump has once again misled the market. Following a wave of misplaced optimism, and in the absence of any concrete agreement with Iran, markets are reverting to their previous risk‑off configuration.
🔻 Selling pressure has returned.
📉 S&P 500 futures are retreating towards the 5,525 level, while Nasdaq 100 futures have fallen back below 23,800.
💵 The US dollar index (DXY) is strengthening again, climbing above 100, pushing EUR/USD back below 1.1600 and down to approximately 1.1530. USD/JPY has also resumed its upward momentum, rising above 159.30.
🛢️ The oil market has re‑accelerated, with spot Brent crude trading close to $108 per barrel.
🇪🇺 In Europe, futures have reversed course. The DAX 40 has fallen to around 23,035, while Euro Stoxx 50 futures are also under pressure, slipping below 5,550.
🥇 Gold futures, which had climbed above $4,800 per ounce, have turned lower and are falling back towards $4,625, weighed down by renewed dollar strength.
₿ Meanwhile, Bitcoin is also losing momentum, declining to around $66,650.
