Market Report.
🕵️ According to multiple reports, Pentagon and U.S. intelligence officials have privately told Congress that there was no specific intelligence indicating Iran was about to launch a preemptive strike on U.S. forces, contrary to the administration’s public claims.
🗞️ Outlets like AP, Reuters, CNN, and Newsweek have all reported on this disconnect between the administration’s public narrative and the private assessments shared with Congress. This undermines the legal and political justification for describing the operation as preemptive self-defense, opening the door for constitutional.
📡 According to Reuters, an Israeli defense official said that the unprovoked U.S.-Israeli military campaign against Iran that was launched on Saturday had “been planned for months, and the launch date decided weeks ago,” even as the U.S. and Iran were engaged in indirect nuclear negotiations.
🤝 The negotiations were likely never serious, as the U.S. and Israel launched large-scale attacks against Iranian targets shortly after the latest round of talks.
🧢 MAGA movement divided over strike on Iran: “Trump has lied to his voters, betrayed our country and dishonoured his legacy.”
🎙️ Key figures within the MAGA sphere, including Tucker Carlson and Steve Bannon, have described the operation carried out alongside Israel as “disgusting and perverse”, warning of potential political consequences in an election year.
🎯 U.S. and Israel targeted not just military sites but the heart of Iran’s leadership in Tehran.
🚀 After the U.S. and Israeli strikes, Iran’s IRGC responded with barrages of ballistic missiles and drones targeting U.S. bases and Israel, leading Israel to shut down its energy sector and airspace as a precautionary measure.
💥 Iran bombed 27 major U.S. bases, inflicting extensive damage, and declared all U.S. and Israeli interests in the region as legitimate targets for retaliation. It also briefly blocked the Strait of Ormuz. Netanyahu took refuge in Berlin during Iran’s response, while Tel Aviv was under attack.
✈️ Major airlines like Emirates and Etihad have suspended all flights worldwide.
🇬🇧 UK Prime Minister Keir Starmer said Britain would support the United States in confronting Iran and would permit the U.S. to use British military bases if necessary.
🗣️ He stated: “The only way to stop the threat is to destroy Iranian missiles at source, in their storage depots or the launchers which are used to fire the missiles.”
💣 The Daily Mail reports that an explosion occurred near a UK military base in Cyprus, according to unnamed sources. Details remain limited, and the extent of any damage or casualties is currently unclear. Authorities have not yet released an official statement confirming the cause or impact of the blast.
🧨 Trump presses on with Iran strikes. President Donald Trump said the bombing campaign against Iran will continue until U.S. objectives are achieved, even as the first American casualties are reported.
📰 A Wall Street Journal report said at least one senior Iranian official sought to resume nuclear talks with Washington. However, Iran’s national security chief Ali Larijani said on X that Iran will not negotiate with the U.S.
🕊️ Israeli newspaper Ynet, reported that an unnamed American official proposed an immediate ceasefire “through a mediator, apparently Italy,” suggesting a ceasefire “today or tomorrow,” and that Iran rejected this outright.
❓ Is there no concrete plan in place?
📺 During an interview with Republican Senator Lindsey Graham on NBC yesterday, the journalist asked whether the administration’s strategy was based on the hope that circumstances inside Iran might eventually change. She referred to a recent post by Donald Trump on Truth Social, in which he wrote: “Hopefully, the IRGC and Police will peacefully merge with the Iranian Patriots.”
🗨️ Graham responded: “No. The future of Iran will be decided by the Iranians.”
🌍 According to ZeroHedge, U.S. military campaign against Iran is not primarily about defending the American people, as claimed by President Trump, nor is it a distraction from the Epstein scandal, as some critics have suggested. Rather, it is part of a broader “Strategy of Denial” aimed at undermining China’s rise as a global superpower.
🛢️ The goal is to obtain proxy control over Iran’s vast oil and gas reserves, which can then be used as leverage to coerce China into accepting a lopsided trade deal that would derail its superpower ambitions and restore U.S. global dominance.
📉 By curtailing China’s access to key energy and trade markets through deals with the EU, India, and pressure on countries like Venezuela, Nigeria, and Iran, the U.S. hopes to force China to rebalance its economy away from exports and towards domestic consumption.
🌐 In the current economic and out of the war scenario:
🏭 Data points to a robust recovery in Japan’s manufacturing sector, fueled by rising domestic and international demand. Japan’s manufacturing activity accelerated in February, with the manufacturing PMI rising to 53.0 – the highest level in almost 4 years. This indicates a strong expansion in the manufacturing sector. Manufacturing output, new orders, and employment all grew at their fastest rates since January 2022, driven by improved global demand and new product launches.
📊 Inflationary pressures, while still elevated, eased slightly from January, with input and output prices rising at a slower rate.
⛽ But the Strait of Hormuz could severely impact Japan’s economy. Japan imports over 90% of its crude oil from the Middle East.
📦 The degree of economic damage will depend on how long the conflict lasts and how it affects operations around the Strait of Hormuz. Japan has 3 months’ worth of oil reserves, but a spike in crude prices or a blockade could still hurt consumption.
🏦 The mix of soft domestic demand and rising inflation could put the Bank of Japan in a holding pattern, potentially delaying its planned interest rate hikes. Analysts expect the BOJ to adopt a more cautious stance on further policy tightening.
📈 Estimates suggest a 10% increase in oil prices could shave 0.1 percentage point off Japan’s real GDP growth. A prolonged disruption could push down growth by 0.18 percentage point and increase inflation by 0.31 percentage point.
🇷🇺 The Russian manufacturing sector continued to contract in February, but the pace of decline eased for the second consecutive month: The manufacturing PMI rose slightly to 49.5 in February, up from 49.4 in January. While still below the 50.0 mark indicating contraction, this represents the softest downturn in a 9-month sequence of decline.
🛢️ What is happening in the oil market?
🚢 Iran has followed through on its threat to close the Strait of Hormuz, which it effectively controls from its southern coastline.
📊 Institutions such as the US Energy Information Administration (EIA) describe Hormuz as the most important oil “chokepoint” in the world. An estimated $1.3 billion worth of energy flows through it every single day.
🌏 Approximately 80–82% of the crude oil transiting Hormuz is destined for Asia, with China, India, Japan and South Korea alone absorbing roughly two‑thirds of those volumes. However, Iran has reportedly stated that only Russian and Chinese vessels will be allowed to pass.
🇪🇺 Europe’s vulnerability: Following the disruption of Russian gas flows via Ukraine, the European Union replaced part of that supply with LNG imports. Around 10% of Europe’s LNG imports transit through Hormuz, leaving the bloc indirectly exposed to any sustained disruption.
📈 Market implications: If the global market were to lose even a meaningful portion of the roughly 20 million barrels per day that pass through Hormuz, prices would surge sharply. Such a price shock would automatically benefit hydrocarbon exporters — including Russia.
🔥 The partial disruption is already pushing Brent crude towards the $80–85 range. A prolonged closure could easily send oil prices above $100 per barrel, potentially recreating an energy shock reminiscent of the 1970s.
Market View.
📈 The outbreak of war over the weekend has triggered a sharp upside gap in oil prices at the open, with crude jumping more than 12%.
🛢️ Spot Brent crude surged above $82.30 per barrel before easing back to around $79.75.
🥇 The bullish patterns we highlighted in gold futures last week have now materialised. Gold has surged to $5,420 per ounce and continues to push higher amid heightened geopolitical uncertainty.
₿ Somewhat surprisingly, Bitcoin did not collapse over the weekend, offering tentative reassurance that the broader market reaction at the open might not be as severe as feared. Bitcoin is currently holding around $65,895.
📉 Meanwhile, E‑mini S&P 500 futures are falling, now trading below the 6,800‑point level and approaching key support zones.
📊 Nasdaq 100 futures have also retreated towards 24,550 points, likewise nearing technical support areas.
💵 The US Dollar Index (DXY) is surging towards 98.50, reflecting its typical safe‑haven behaviour during periods of rising global uncertainty. Despite this move, EUR/USD is holding above 1.1815.
💱 However, pairs such as USD/JPY are displaying strongly bullish patterns, suggesting a potential move towards the 158 region in the coming sessions.
