Renewed Move Out of Riskier Assets on Mideast Conflict Fears – Currency Thoughts

Renewed Move Out of Riskier Assets on Mideast Conflict Fears

March 26, 2026

The Middle Eastern war may be about to become much fiercer. President Trump’s plea for Iran to accept a deal continues to be rebuffed, and the red-line demands of each side are miles apart. Meanwhile, Israel claims to have killed another top Iranian official, this time the naval commander Alireza Tangsiri, who has been overseeing the successful shutdown of most shipping traffic through the Strait of Hormuz. Also, a fresh Economic Outlook from the OECD has revised projected 2026 inflation forecasts sharply above ones issued three months ago. On the central banking front, markets are adjusting their interest rate assumptions upward, the Bank of Norway changed its forward guidance to embody one or two 25-basis point hikes later this year, and the Monetary Board of the Central Bank of the Philippines held an unscheduled meeting to discuss supply-driven upside risks to inflation caused by the war.

Asian stock markets had a difficult Thursday session, closing with losses of 3.2% in South Korea, 1.9% in Hong Kong and Indonesia, and 1.1% in China. Japan got off easy with just a 0.3% dip in the Nikkei-225, but a selling wave hit European markets which currently show losses of 1.2-1.7% in the U.K., Germany, France, Italy and Spain. In futures trading prior to the U.S. open, the major barometers currently are down between 0.8% in the case of the DOW to -1.3% in the Russell 2000.

Prices for silver, gold and Bitcoin are presently sporting declines of 7.2%, 2.9% and 2.7% on the day, while WTI oil’s price has resurged 4.9% to almost $95 per barrel.

The rush into sovereign debt has seen 10-year yields climb today so far by 14 basis points in Brazil and Italy, 11 bps in France and Great Britain, 10 bps in Spain, 8 bps in Germany, 6 bps in Switzerland and five basis points in the U.S. Treasury note.

ShareThis

This entry was posted
on Thursday, March 26th, 2026 at 7:08 am and is filed under New Overnight Developments Abroad – Daily Update.
You can follow any responses to this entry through the RSS 2.0 feed.