Markets Today: RBA hike rates, European shares eye lower open, ZEW sentiment, ADP employment data up next

• Asian stocks surged, led by South Korean chipmakers Samsung and SK Hynix, on optimism regarding AI chip manufacturing partnerships.
• The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.1% in a split vote due to renewed inflationary pressures and labor market tightness.
• European shares are headed for a lower open.
• Later today, ZEW sentiment and ADP employment change data will be the focus.

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Asian stocks maintained their upward momentum on Tuesday, marking a second consecutive day of gains as investors navigated a complex landscape of geopolitical tension and central bank activity.

Despite the underlying market anxiety regarding the economic fallout from the conflict between the US and Iran, regional indices showed notable resilience.

The rally was particularly strong in South Korea, where the Kospi surged nearly 3% and the Kosdaq climbed over 1.5%. The surge in South Korean markets was largely fueled by a powerful rally in the semiconductor sector, led by a 5% jump in Samsung Electronics and a 3.7% gain for rival SK Hynix.

This momentum followed comments from Nvidia CEO Jensen Huang, who confirmed that Samsung is manufacturing the company's newest AI chips.

This high-profile partnership has sparked optimism among analysts, with many now predicting that Samsung's previously loss-making foundry division could pivot back to profitability as early as next year.

This AI-driven enthusiasm extended across the region, boosting other tech-heavy markets that stand to benefit from the global chip boom. Taiwan's benchmark index rose as much as 2%, reflecting its critical role in the AI supply chain. Together, these gains provided a significant lift to the broader region, driving the MSCI EM Asia index up approximately 1.9% during Tuesday's session.

Japan also saw healthy gains, with the Topix rising more than 1% and the Nikkei 225 advancing 0.75%, while Australia’s S&P/ASX 200 posted a more modest increase of approximately 0.27%.

In a move that aligned with market forecasts, the Reserve Bank of Australia (RBA) increased its cash rate by 25 basis points to 4.1% during its March 2026 meeting.

This decision, which followed a previous hike in February, was reached via a split vote and was primarily motivated by a suite of data indicating renewed inflationary pressures throughout the latter half of 2025.

While the Board views some of this recent uptick as temporary, they highlighted a tightening labor market and more significant capacity constraints than were previously estimated.

The central bank remains cautious as the ongoing Middle East conflict introduces heightened uncertainty, potentially exacerbating inflation risks both domestically and abroad. With the RBA anticipating that inflation will stay above its target range for the foreseeable future, and with risks currently skewed to the upside, policymakers determined that this latest increase was necessary to anchor expectations.

Moving forward, the Board will maintain a flexible, data-dependent stance, closely monitoring global financial conditions, domestic demand, and labor trends to balance their dual mandate of price stability and full employment.

European equity markets are braced for a negative open this Tuesday, with Euro Stoxx 50 and Stoxx 600 futures both sliding approximately 0.4% in premarket trading.

This cautious sentiment is largely driven by a rebound in oil prices, sparked by intensifying Iranian attacks on regional energy infrastructure. Investor anxiety has been further compounded by the fact that most nations have yet to back US President Donald Trump’s request for military support to secure commercial shipping through the Strait of Hormuz, leaving the vital waterway vulnerable.

As the session unfolds, market participants will pivot to key economic indicators and corporate results to gauge the region's health.

On the corporate front, the luxury and biotech sectors will be in focus as Salvatore Ferragamo and Autolus Therapeutics are scheduled to release their latest earnings reports.

The US dollar strengthened on Tuesday as escalating conflict in the Middle East drove investors toward safe-haven assets, dampening global risk appetite.

The US Dollar Index (DXY) rose 0.19% to 100.05, marking a total gain of approximately 2.5% since the outbreak of hostilities in late February.

This surge weighed heavily on European currencies, with the euro weakening to $1.1479 nearing a seven-month low and sterling retreating 0.3% to $1.3279.

Meanwhile, the Australian dollar experienced volatile trading as markets processed hawkish signals from the RBA chief following their narrow vote to hike rates.

In Asia, the Japanese yen continued its descent, weakening to 159.40 per dollar and approaching the critical 160 threshold. Despite verbal warnings from Japanese authorities, analysts suggest the threshold for physical currency intervention may be higher than usual due to the inflationary pressure of rising oil prices. Though the yen has shed over 2% against the greenback in March, Bank of Japan Governor Kazuo Ueda noted that underlying inflation is trending toward the 2% target.

Nevertheless, the central bank is widely expected to maintain steady rates at the conclusion of its policy meeting this Thursday.

Currency Power Balance

Energy and precious metals markets saw a significant recovery on Tuesday as supply concerns and geopolitical risks took center stage.

Oil prices surged over 2%, clawing back losses from the previous session. This rally was fueled by intensifying worries over the Strait of Hormuz, which remains largely closed, and reports that US allies are hesitating to deploy warships to escort tankers through the volatile waterway.

By early morning, Brent futures jumped 2.7% to $102.95 per barrel, while WTI crude climbed 2.6% to $95.95, a sharp reversal from Monday's slump when brief signs of vessel movement had initially cooled prices.

In the metals market, gold prices firmed as investors balanced the ongoing Middle East conflict against a heavy week of central bank policy decisions.

Spot gold rose 0.4% to trade above the $5,000 mark, specifically reaching $5,023.19 per ounce, while U.S. gold futures for April delivery saw a similar 0.5% gain.

This upward trend extended across the sector: silver edged up 0.6% to $81.28, palladium rose 1.4%, and platinum led the group with a robust 2.2% increase to $2,161.35 per ounce.

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It is a quiet day on the European calendar with the only key data release in the European session coming in the form of German ZEW sentiment data.

Looking at the US session and it is also light in terms of data with ADP employment change the highlight. Other factors that may influence markets today include the continuation of the NVIDIA AI conference which did boost AI stocks and may have an impact on volatility once more while any developments around the Middle East remains front and center.

From a technical perspective, the FTSE 100 index is currently locked in a consolidation phase, attempting to establish a viable floor.

The index is trading in a tight range centered around 10,310, as buyers and sellers battle for control.

Immediate Resistance: The first hurdle for bulls sits at 10,470, which aligns with the 200-period Simple Moving Average (yellow line). A break above this would target the psychological 10,550 level (dark blue line), which formerly acted as support and has now flipped to resistance.

Key Support: On the downside, the 10,269 level is the immediate line in the sand. Should this fail, the recent swing low at 10,101 represents the final major support before the psychological 10,000 mark comes into play.

The technical "death cross" or bearish alignment of the moving averages suggests that the path of least resistance remains tilted to the downside.

The SMA 50 (10,552) is currently trending downward above the SMA 200 (10,469), creating a "supply zone" that will likely attract sellers on any relief rallies.

The Relative Strength Index (RSI) period-14 is currently hovering at 48.3, effectively in "no man's land." After hitting oversold conditions in early March (which triggered several "BULL" pivot signals on the chart), momentum has neutralized.

The lack of a clear divergence suggests that while the aggressive selling has paused, there is currently no strong conviction for a sustained breakout.

FTSE 100 Index Four-Hour Chart, March 17, 2026

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