Market News

• Warsh faces turbulent Fed transition as inflation, politics and oil shock collide.
• Japan weighs cutting inflation-linked bond buybacks as demand rises
• ICYMI: Fitch sees Brent at $120 if Hormuz closure persists in 2026
• IEA warns Middle East crisis worse than 1970s oil shocks, eyes stock releases
• Saudi Aramco cuts Asia oil supply as Hormuz disruption tightens market
• PBOC sets USD/ CNY reference rate for today at 6.9041 (vs. estimate at 6.8928)
• Gold gets smashed as oil shock lifts yields, boosts dollar, and crushes rate-cut hopes.
• Japan flags FX intervention risk. Oil shock drives yen volatility and policy response.
• Saudi pipeline bypass eases oil shock, here's what’s next for global supply.
• UK calls emergency COBRA meeting as Iran war lifts…

Bearish for UK bonds (higher yields) and negative for growth outlook; supports inflation expectations and hawkish BoE repricing, with spillover risk to global fixed income markets.

Summary:

• UK PM Starmer convenes emergency “COBRA” meeting on Iran war fallout
• Finance minister Reeves and BoE Governor Bailey to attend
• Focus on energy security, inflation, and economic resilience
• UK particularly exposed due to reliance on imported gas
• Inflation risks seen rising toward ~5% amid energy price surge
• Market pricing shifts toward potential BoE rate hikes
• UK 10-year gilt yields surge above 5% for first time since GFC
• Investor concerns grow over fiscal vulnerability and support measures

The UK government is stepping up its response to the…

Fitch outlook cut puts New Zealand’s fiscal path under scrutiny and lifts yields.

Summary:

• Fitch revises New Zealand outlook to Negative, affirms AA+ rating
• Concerns centre on delayed fiscal consolidation and rising debt
• Government debt projected to peak around 56% of GDP by FY27
• Timeline for return to surplus pushed out to FY30
• Economic recovery expected but risks remain from external shocks
• Iran conflict flagged as inflation and growth risk via energy channel
• Elevated current account deficit and high household debt persist
• NZ bond yields rise to ~1-year highs following outlook downgrade

Fitch Ratings has revised New Zealand’s sovereign outlook to Negative from Stable while affirming its AA+ credit rating, citing growing challenges…

The USD is a little higher in early indications.

Pretty soon wholesale market participants will be getting active and machines will be switched on. Until then, like I said above, its thin and scatty. Take care.

I'll be back with weekend baloney news soon.

This article was written by Eamonn Sheridan at investinglive.com.

Here is the latest from Trump:

We are getting very close to meeting our objectives as we consider winding down our great Military efforts in the Middle East with respect to the Terrorist Regime of Iran: (1) Completely degrading Iranian Missile Capability, Launchers, and everything else pertaining to them. (2) Destroying Iran’s Defense Industrial Base. (3) Eliminating their Navy and Air Force, including Anti Aircraft Weaponry. (4) Never allowing Iran to get even close to Nuclear Capability, and always being in a position where the U.S.A. can quickly and powerfully react to such a situation, should it take place. (5) Protecting, at the highest level, our Middle Eastern Allies, including Israel, Saudi Arabia, Qatar, the United Arab Emirates,…

• Trump says reopening Hormuz "a simple military manoeuver" with "so little risk"
• US made detailed preparations for potential ground troops in Iran - report
• US assessment: Iran could keep Hormuz shut for anywhere from one to six months
• Iran unwilling to discuss Hormuz while under attack - report
• Canada January retail sales +1.1% vs +1.5% expected
• Canada February producer price index +0.4% m/m vs +1.1% expected
• Feds Waller: If oil stays high for months on end, at some point it bleeds into inflation
• Fed's Bowman: I am still concerned about the jobs market
• The Fed funds futures market is now pricing in a 30% chance of a US rate hike
• Trump reportedly mulls occupying Kharg Island to force Iran to reopen Strait of Hormuz

Markets:

• Gold down $143 to $4502
• US…

• At a certain point, the Strait will open itself
• I think Israel will be ready to end the war when the US wants it to end
• I don't want to do a ceasefire
• We can have dialogue but I don't want to do a ceasefire
• On Hormuz: It would be nice if China and Japan got involved
• On UK help: A very late response, they should have acted faster
• Says lacks radar, aircraft, and leadership, with a firm stance against a ceasefire
• We have unlimited ammunition and a lot of troops
• On oil prices, Trump said he expected worse
• Repeats that operation is "weeks ahead" of schedule
• We don't need to Strait of Hormuz

So the context of the ceasefire comment is that Iran said it won't negotiate without a ceasefire while Trump is saying they can "have dialogue" but that he doesn't…

• At a certain point, the Strait will open itself
• I think Israel will be ready to end the war when the US wants it to end
• I don't want to do a ceasefire
• We can have dialogue but I don't want to do a ceasefire
• On Hormuz: It would be nice if China and Japan got involved
• On UK help: A very late response, they should have acted faster
• Says lacks radar, aircraft, and leadership, with a firm stance against a ceasefire
• We have unlimited ammunition and a lot of troops
• On oil prices, Trump said he expected worse
• Repeats that operation is "weeks ahead" of schedule
• We don't need to Strait of Hormuz

So the context of the ceasefire comment is that Iran said it won't negotiate without a ceasefire while Trump is saying they can "have dialogue" but that he doesn't…

Comments from Netanyahu:

• Iran has no capacity to enrich uranium or make ballistic missiles following 20 days of war
• Iran has few ballistic missiles left
• It's too soon to tell if Iranians will take to the streets
• Will attack Iran's leaders
• I pledged to change the Middle East, and we have done so, and Israel has become a regional superpower
• Iran had thousands of ballistic missiles and was threatening to topple our towers, but what falls are the towers of Tehran and Beirut
• Campaign will take as long as necessary
• Israel is helping the US to open Hormuz
• There are many possibilities for a ground component, will not share what they are
• We can not do a revolution from the air, there needs to be a ground component as well
• Air strikes are not enough, ground…

Pentagon officials have made detailed preparations for deploying US ground forces into Iran, according to a CBS report.

The report says Trump is deliberating whether to position ground forces in the region.

"No, I'm not putting troops anywhere," Trump said yesterday but quickly added: "If I were, I certainly wouldn't tell you."

I wonder why this was leaked. I tend to think it might be something to bring Iran to the negotiating table but it could also be from those who think sending troops to the Middle East is a grave mistake.

Finally, it could all be part of the usual planning and options that all military officials are constantly doing. So far, the reports we have are that two units of Marines have been deployed, with about 2200 soldiers…

CNN is out with a report highlighting the difficulty of reopening the Strait of Hormuz:

US officials are furiously trying to avert a potential months-long closure of the Strait of Hormuz, privately acknowledging that reopening the key waterway is a problem without a clear solution

The report from the Defense Intelligence Agency said it could remain shut from 1-6 months, citing four sources familiar.

An official pushed back against the six-month scenario, saying:

the six month closure of the Strait of Hormuz is an impossibility and completely unacceptable to the Secretary of War

Oil is higher on this report but it's notable that this assessment isn't current, it was said to be circulating "in recent weeks" which suggests it was prepared before…

A Bloomberg report citing an Iranian official says that Iran is sticking to its hardline position on the Strait of Hormuz and unwilling to discuss opening it while it's under attack.

The report says:

Iranian officials have become reluctant to even discuss reopening the Strait of Hormuz as they focus on surviving the US-Israeli onslaught, according to a person involved in direct, high-level contacts with Tehran.

It looks like early next week, we will have some kind of showdown between the US navy and Iran's soldiers near the strait. How that unfolds is uncertain because President Trump confirmed there are no plans to send troops to any place. Of course, truth is the first casualty of war and this whole thing started while peace discussions…