Daily Market Outlook, March 3, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Stock markets took a sharp hit while bonds faced heavy selling as Iran intensified its attacks on the U.S. and its allies in the Middle East. This escalation sent oil prices soaring and reignited concerns about inflation, while the Dollar gained strength. The MSCI Asia Pacific Index dropped as much as 2.8%, marking its steepest two-day decline since April. Meanwhile, South Korea's Kospi Index, which had been one of the top-performing stock markets globally this year, plunged by as much as 6.8% after reopening following a long weekend. Futures for equity indexes in both the United States and Europe also slipped by roughly 1%, signalling that more losses could be on the horizon. All eyes remain on oil, which continued its upward climb as tensions between the U.S., Israel, and Iran escalated further. In response, Tehran threatened to shut down the Strait of Hormuz, a vital route for global petroleum shipments. Brent crude surged past $80 per barrel after jumping over 7% on Monday alone. The spike in oil prices has sparked worries about inflation and dampened sentiment around global bonds, leading traders across Asia-Pacific markets to offload government debt. The conflict in the Middle East is reigniting inflation fears across financial markets, casting a shadow over global bonds that had recently enjoyed their strongest start to a year since the pandemic era. From Sydney to Tokyo, traders have been shedding government bonds since early this week, bracing for the potential fallout of a prolonged geopolitical crisis that could keep oil prices elevated and drive inflation higher. As a result, government bonds in major economies like the U.S., Japan, Australia, New Zealand, and South Korea have all seen their values decline, losing their luster as safe-haven assets.

The UK Chancellor’s Spring Statement will be a much lower-profile fiscal event compared to last November’s Budget. This is partly due to it being overshadowed by ongoing conflict in the Middle East. Additionally, the short interval between the two forecasts has reduced the scope for significant new information to influence the OBR’s projections. Coupled with a larger initial headroom of £21.7bn against the fiscal rule, any modest changes to this estimate are unlikely to cause much concern. For instance, a £5bn shift in headroom over a 4-5 year horizon would seem relatively insignificant, particularly when considering that January’s public finance outcomes revealed the November Budget forecasts were off by more than £20bn within just 4-5 weeks. However, for the gilt market, the Spring Statement remains a critical event as it will set out the government’s financing remit for the 2026-27 fiscal year. We estimate gilt sales to total £245bn, representing a significant reduction of approximately 19% compared to 2025-26. We also anticipate that the maturity structure of the issuance program will remain broadly consistent with the current year’s approach.

Overnight Headlines

  • Trump Won’t Rule Out Sending US Troops Into Iran ‘If Necessary’

  • ‘The Hardest Hits Are Yet to Come’ for Iran, Rubio Says

  • US Preparing For "Major Uptick" In Attacks In Next 24 Hours

  • US Embassy In Riyadh Attacked As Iran Steps Up Saudi Strikes

  • We Are Beginning To See Cracks In The Top Iranian Leadership

  • US Will Take Action To Mitigate Oil Price Spike For Americans, Rubio Says

  • US Manufacturing Grows Steadily In February, Input Prices Surge

  • Dimon Warns Higher Infl. Risks Being ‘Skunk At A Party’ For US

  • France To Boost Nuclear Arsenal With US Commitments In Doubt

  • UK Food, Shop Price Inflation Slow In February, Survey Shows

  • RBA Says Inflation Patience Has Limits, March Meeting Is ‘Live’

  • Japanese Firms Boost Spending As Takaichi Makes Investment Push

  • China Boosts Output Of Advanced Nuclear-Armed Subs, US Navy Says

  • Oil Supertanker Rates Soar To Record On Middle East Conflict

  • Strait Of Hormuz Ship Traffic Slows To A Crawl, On Iran Tensions

  • Venezuela’s Crude Exports Double In February Under US Oversight

  • Middle East Oil Faces Pricing Confusion as Hormuz Traffic Halted

  • US Mulls Capping Nvidia H200 Sales at 75,000 per Chinese Customer

  • Musk’s X, xAI To Repay $17.5 Billion Debt As SpaceX IPO Nears

  • Paramount’s Debt Downgraded to Junk Following Warner Bros. Deal

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

  • N/A

CFTC Positions as of February 27, 2026: 

- S&P 500 CME net short: +14,318 contracts (465,965 total)

- S&P 500 CME net long: +36,890 contracts (1,005,549 total)

- CBOT US 5-year Treasury futures net short: -92,311 contracts (2,064,931 total)

- CBOT US 10-year Treasury futures net short: -103,833 contracts (774,020 total)

- CBOT US 2-year Treasury futures net short: +113,628 contracts (1,348,036 total)

- CBOT US UltraBond Treasury futures net short: +5,299 contracts (280,487 total)

- CBOT US Treasury bonds futures net long: -1,351 contracts (5,074 total)

- Bitcoin net long position: 1,172 contracts

- Swiss franc net short: -41,186 contracts

- British pound net short: -57,072 contracts

- Euro net long: 156,856 contracts

- Japanese yen net long: 11,539 contracts

Technical & Trade Views

SP500

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Above 6900 Target 7040

  • Below 6900 Target 6730

EURUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 1.1860 Target 1.1960

  • Below 1.1730 Target 1.1560

GBPUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Above 1.3635 Target 1.3760

  • Below 1.3450 Target 1.3150

USDJPY 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 155.50 Target 157.50

  • Below 155 Target 152

XAUUSD

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 5150 Target 5325

  • Below 5100 Target 4930

BTCUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bearish

  • Above 71k Target 75k

  • Below 70k Target 53k

1 / 6