Markets Today: Chinese data positive as Middle East conflict remains tense. Oil steady, FTSE 100 consolidate. Canada CPI up next

• Oil prices steady near $100/barrel due to US strikes on Kharg Island and ongoing Middle East conflict, raising global inflation concerns
• Asian and European stock markets saw a cautious, mixed start, with investors focused on upcoming policy decisions from eight major central banks.
• The US dollar pulled back slightly from a 10-month peak, Canadian CPI data ahead.

Most Read: Chart alert: WTI crude oil rally almost reached $102.25, risk of minor setback towards $88.36

Monday saw a cautious atmosphere across Asian markets as ongoing tensions in the Gulf maintained high oil prices, complicating the global inflation outlook. This geopolitical strain is expected to keep most central banks from adjusting rates during their upcoming policy meetings, though at least one hike is still anticipated.

Despite the tension, a glimmer of stability emerged following a Wall Street Journal report suggesting the Trump administration may soon announce a coalition of countries dedicated to escorting vessels through the Strait of Hormuz.

While President Trump warned that a lack of ally participation would negatively impact the future of NATO, markets remained largely skeptical.

This uncertainty resulted in a mixed performance for risk assets; Japan’s Nikkei fell 0.3%, whereas South Korean stocks managed a 0.7% gain after a difficult previous week.

Overall, the MSCI Asia-Pacific index outside of Japan saw a modest increase of 0.4%.

In China, blue-chip stocks declined by 0.5% despite economic data for January and February showing that retail sales and industrial output exceeded expectations.

Markets appeared more focused on the real estate sector, where housing prices continued their downward trend, offsetting the positive news from the industrial and retail sectors.

European markets mirrored its Asian counterparts with a cautious start to the week.

The STOXX 50 and STOXX 600 indices remained largely flat. Traders are keeping a close watch on developments in the Middle East as the market prepares for a high-stakes week of central bank policy decisions from both the Federal Reserve and the European Central Bank.

Boosted by the climb in crude prices, the energy sector spearheaded market gains. Major players such as Shell and TotalEnergies saw modest upticks, joined by slight advances from HSBC and Unilever.

However, the most notable activity occurred in the banking sector; Commerzbank surged by 3.6% following UniCredit’s move to increase its stake in the German lender to over 30%. While UniCredit shares also rose by 0.8% on the news, the broader market was weighed down by a slump in the healthcare sector, with Roche, Novartis, and AstraZeneca all trading in the red.

The US dollar experienced a slight retreat from its 10-month peak, with the dollar index easing to 100.29. This minor decline follows a robust 1.5% gain last week and comes as the global financial community prepares for a high-stakes week.

Markets are bracing for policy meetings from at least eight major central banks, including the Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, marking their first official gatherings since the onset of the conflict in the Middle East.

Market participants are particularly keen to see how these policymakers balance the inflationary pressures of elevated oil prices against broader risks to economic growth.

As the dollar cooled, several major currencies saw a brief reprieve.

The euro managed to bounce back 0.2% to $1.1440 after touching a 7-1/2-month low earlier in the session.

Similarly, sterling climbed 0.23% to $1.3253, though it remains uncomfortably close to the 3-1/2-month low it hit last Friday following a sharp weekly decline.

The New Zealand dollar also gained 0.5%, while the onshore yuan held steady as investors weighed new economic data alongside the progression of Sino-US trade negotiations.

The Australian dollar was a notable outperformer, rising 0.43% to $0.7010. This strength was driven by hawkish expectations surrounding the Reserve Bank of Australia’s upcoming meeting on Tuesday. With markets currently pricing in a 72% probability of a 25-basis-point hike, the Australian dollar is benefiting from a divergence in sentiment as other central banks remain in a more cautious "wait-and-see" posture.

Currency Power Balance

Oil prices surged on Monday as market attention shifted back to the vulnerabilities of Middle East energy infrastructure.

Despite President Trump’s public calls for an international coalition to secure the Strait of Hormuz, supply anxieties were heightened by US strikes on Kharg Island over the weekend.

The island serves as the primary conduit for Iranian oil exports, currently the dominant flow through the Strait of Hormuz. Markets remain wary of potential disruptions, even though the strikes reportedly targeted military assets rather than energy facilities.

By mid-morning, Brent crude futures climbed $2.73 to reach $105.87 per barrel, while US West Texas Intermediate followed suit with a 1.7% increase to $100.36.

These gains build on an already strong performance from the previous Friday, reflecting a market deeply concerned about the regional stability of global energy shipments.

In the metals market, gold prices managed to stabilize after recovering from a three-week low hit earlier in the session.

Spot gold edged up 0.2% to $5,027.98 per ounce, supported by a softening US dollar and lingering safe-haven demand.

However, the upside for the precious metal remains capped by the realization that elevated energy prices may force the Federal Reserve to delay interest rate cuts, a sentiment reflected in the 0.6% dip of US gold futures for April delivery.

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It is a quiet start to the week on the data front with the only high impact release today coming from Canada, with inflation data due in the US session.

The Middle East conflict showed no signs of easing over the weekend as the US and Israeli militaries continued their campaign against strategic Iranian targets. In response, Iran has maintained its efforts to disrupt the regional economy, keeping the vital Strait of Hormuz effectively closed to global shipping.

While the US push for a naval escort coalition signals a lack of immediate diplomatic resolution, markets have shifted their focus toward the impending response from global financial authorities.

This week is a critical juncture for monetary policy, with eight of the G10 central banks, including the Federal Reserve and the Bank of England scheduled to meet.

The US Dollar Index (DXY) is currently testing the upper limit of its nine-month trading range, holding steady between 100.35 and 100.40. Although a more stable equity market this Monday suggests the dollar may pause before climbing further, market participants remain hesitant to bet against its strength until there is concrete evidence of de-escalation in the Gulf.

From a technical perspective, the FTSE 100 index continued its decline this morning breaking back below a key support area.

After a sharp decline from March peaks, the index is consolidating near the bottom of its recent range, struggling to reclaim key moving averages.

Key Technical Levels

Resistance: The immediate hurdle is the 10,269 level. Above that, the 200-period SMA (yellow) at 10,467 and the 50-period SMA (black) at 10,564 act as significant dynamic resistance.

Support: Strong psychological and technical support sits at 10,101. A break below this could signal a deeper move toward the 10,000 handle.

Momentum Indicators

The RSI (14) is currently flat at 44.0, indicating a lack of bullish conviction but also suggesting the market is not yet oversold. Having recently moved away from "Bull" signals in early March, the index is now in a "wait-and-see" phase.

Outlook: Neutral-to-Bearish. Until the FTSE can clear the moving average cluster, the path of least resistance remains lower.

FTSE 100 Index Four-Hour Chart, March 16, 2026

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