News

UK calls emergency COBRA meeting as Iran war lifts inflation and gilt yields

Posted on: Mar 23 2026

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 escalating Iran conflict, with Prime Minister Keir Starmer set to chair an emergency meeting focused on the economic fallout and rising risks to financial stability.

The high-level “COBRA” meeting will bring together key policymakers including Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey, alongside senior cabinet ministers responsible for foreign affairs and energy. Officials are expected to assess the impact of the crisis on households, businesses, energy security, and supply chains, as well as coordinate the UK’s broader international response.

The move comes as markets brace for heightened volatility, with geopolitical tensions threatening to trigger a renewed energy price shock. Iran has warned it could target energy and water infrastructure across the Gulf if tensions escalate further, raising the risk of sustained disruption to global oil and gas flows.

The UK is seen as particularly vulnerable to such shocks due to its heavy reliance on imported natural gas, persistent inflation pressures, and already strained public finances. Analysts say these factors have contributed to a sharper sell-off in UK government bonds compared with other major economies.

Bond markets have reacted aggressively. The yield on the UK 10-year gilt has surged above 5% for the first time since the global financial crisis, reflecting a rapid repricing of inflation and interest rate expectations. Initially, the sell-off was concentrated in shorter-dated bonds, but it has since broadened across the curve, suggesting rising concerns about both monetary policy tightening and fiscal sustainability.

Economists warn that the surge in energy prices could push UK inflation back toward 5% later this year, reversing recent progress and complicating the Bank of England’s policy outlook. Markets have already shifted from expecting rate cuts to pricing in the possibility of further tightening, although policymakers have signalled it is too early to commit to a specific path.

At the same time, the government faces mounting pressure to support households and businesses through another cost-of-living squeeze. While targeted measures are being considered, broader fiscal intervention risks undermining efforts to stabilise public finances, potentially forcing difficult policy trade-offs in the months ahead.

Analysts say the combination of geopolitical risk, inflation pressures, and fiscal constraints is pushing the UK into a more fragile position, with markets increasingly sensitive to any signs of policy missteps as the crisis evolves.

-

COBRA (Cabinet Office Briefing Rooms) is the UK government’s emergency response committee, convened to coordinate decision-making during major crises such as security threats, natural disasters, or economic shocks. Chaired by the Prime Minister or a senior minister, it brings together key officials, including ministers, intelligence agencies, and relevant departments, to share information, assess risks, and agree on rapid policy responses. COBRA is not a standing body but is activated as needed to ensure a unified, cross-government approach during high-impact events.

This article was written by Eamonn Sheridan at investinglive.com.
Commodities weekly: From energy shock to stagflation risk

Posted on: Mar 21 2026

Key Points:

  • The Bloomberg Commodity Total Return Index is little changed on the week, but that headline number masks a sharp internal rotation across sectors 

  • Attacks on energy infrastructure across the Persian Gulf risk delaying normalisation even after any ceasefire and reopening of the Strait of Hormuz 

  • Higher energy costs are lifting inflation expectations, pulling a short-term brake on precious metals amid raising long-end yields and reduced rate cut expectations 

  • Second round effects seen through rising agriculture commodities as they reflect higher energy, freight and fertiliser costs

The Bloomberg Commodity Total Return Index (BCOMTR) is little changed on the week, down just 0.2%, but that headline number masks a sharp internal rotation across sectors. Continued strength in energy - led by diesel, gasoil and crude - has been offset by a major correction across precious and industrial metals.

However, the nature of the energy shock is evolving. What began as a supply disruption risk centered on the Strait of Hormuz has developed into a more complex and persistent challenge involving damaged infrastructure, disrupted trade flows and with that rising macroeconomic headwinds.

Month-to-date, the impact of the Middle East escalation is far more visible. The index is up around 11%, driven primarily by a surge in energy and refined products, with the BCOM Energy index up 41% on the month. This supports a year-to-date gain of around 24% for the sector, underlining its strong outperformance versus other asset classes, particularly equities, while confirming that the broader uptrend remains intact, now led by energy following a temporary setback in previously strong metals.

Macro: Inflation rises as growth expectations weaken

The energy shock is feeding directly into the macroeconomic outlook. Higher prices for crude, fuel products and gas, as well as the disruption in the flow of fertilizers potentially adding upward pressure on food prices in the months ahead, are lifting inflation expectations at a time when central banks had been preparing to ease policy.

Instead, markets are now reassessing the trajectory for interest rates. Rising energy costs are pushing long-end yields higher and reducing expectations for near-term rate cuts. In the last three weeks alone, projections for U.S. rate cuts in 2026 has slumped from around three 25 basis point cuts to less than one currently. At the same time, the nature of the shock - a supply-driven increase in costs - raises concerns about its impact on economic activity.

Unlike demand-driven inflation, which can be addressed through tighter monetary policy, a supply shock risks simultaneously lifting prices and slowing growth. The result is a more stagflationary environment, where central banks face a trade-off between supporting growth and containing inflation.

For commodity markets, this shift is critical. While energy benefits directly from supply constraints, other sectors—particularly those sensitive to economic growth—are increasingly exposed to downside risks.

Commodities performance - Source: Bloomberg & Saxo

Energy: Infrastructure damage points to higher for longer

Crude oil traded higher on the week as the conflict persisted and the Strait of Hormuz remained effectively closed, with strikes increasingly targeting energy infrastructure. Price action remains asymmetric, pulled between political signals aimed at containing prices and a worsening on-the-ground situation that now includes direct attacks on critical production assets.

Crude benchmarks are diverging, with WTI trading at a sizeable discount to Brent and Middle East-linked grades despite the disruption. This highlights that headline crude prices are not fully capturing the scale of the shock. Tightness is most visible in Asian physical markets, where disrupted Middle East supply has forced refiners to bid for prompt cargoes, lifting nearby pricing and regionally linked benchmarks. WTI, by contrast, remains more insulated, reflecting inland U.S. dynamics and weaker exposure to immediate global flows. The disruption is therefore expressed more clearly through location spreads, time spreads and products than in flat crude prices.

Attacks across the Persian Gulf, including significant damage to Qatar’s LNG infrastructure, point to supply constraints that may persist for years rather than months. Combined with restricted transit through Hormuz, higher insurance costs and logistical friction, any post-ceasefire recovery in flows is likely to be gradual rather than immediate.

Refined products continue to signal the underlying stress. Diesel and jet fuel have surged, with strong premiums to crude reflecting tight inventories and robust demand for middle distillates. This underscores that downstream constraints are now as critical as upstream supply risks.

In this context, softer crude prices should not be mistaken for easing conditions. Instead, they reflect a temporary buffer from elevated oil-on-water inventories accumulated ahead of the conflict. As these are drawn down, the risk of a sharper price response—potentially into demand-destruction territory—remains unless flows from the Middle East are fully restored.

Metals: Liquidation replaces momentum

Gold is heading for its biggest weekly loss in six years after breaking below USD 5,000, triggering a wave of technical selling. Silver, with its higher beta and industrial exposure, has corrected more sharply, while platinum and palladium have also moved lower.

Rising inflation expectations have pushed yields higher, reducing the appeal of non-yielding assets, while a stronger dollar and fading rate-cut expectations have added further pressure. At the same time, elevated speculative positioning left both gold and silver vulnerable to a rapid unwind once key technical levels gave way, with leveraged and systematic strategies amplifying the downside.

There is also emerging, though still secondary, speculation that some surplus economies may need to raise liquidity, potentially including gold sales. While not a confirmed driver, it adds to the more cautious tone. Overall, gold’s failure to rally despite geopolitical stress highlights the current dominance of higher real yields, a firmer dollar and position adjustment over its traditional safe-haven role.

Industrial metals have come under pressure for related but more growth-driven reasons. Copper, aluminium, nickel and zinc have all declined as concerns about global demand begin to outweigh earlier supply disruptions and energy-transition support.

While the near-term outlook has become more challenging, we maintain a constructive view on precious metals once the current liquidation phase subsides. Fiscal concerns remain elevated, with rising government debt levels likely to worsen in the event of an economic slowdown. At the same time, the current shock carries clear stagflationary characteristics: if inflation remains elevated while growth weakens, central banks will face a difficult trade-off between easing policy and risking renewed inflation or staying restrictive and deepening the slowdown.

In that environment, gold’s role as a hedge against monetary debasement and dollar exposure remains intact, supported by the ongoing trend toward de-dollarisation and diversification of reserves. However, some of this demand could be partially offset if certain central banks are forced to raise liquidity through asset sales, including gold, in response to falling revenues or rising costs linked to the energy shock. Even so, structural drivers continue to point to a supportive longer-term backdrop for precious metals.

Agriculture and softs: Second-round effects emerge

Beyond energy and metals, the impact of the shock is beginning to spread across agriculture and soft commodities. The sector has posted a modest gain overall this past week, while broad gains have been recorded so far this month. Led by commodities that directly or indirectly have received a boost from higher energy prices and disruption to shipments, not least that of fertilisers with the Persian Gulf being a major production hub given its access to cheap natural gas, the main feedstock.

The bio-fuel and ethanol link to rising fuel prices have supported gains in corn, soybean oil and sugar, while drought across the southern US following a very dry winter has raised crop concerns thereby underpinning prices for wheat and cotton, the latter also being supported by the rising cost of synthetic fibres which are produced from petrochemical-based raw materials.

Sugar has been a notable outperformer, rising to the highest level since October. The rally reflects both direct and indirect effects from the energy market. Higher oil prices are supporting ethanol production in Brazil, reducing the availability of cane for sugar. At the same time, disruptions in the Strait of Hormuz have affected shipping routes, with vessels carrying raw sugar stranded or rerouted, constraining refining capacity and tightening supply.

These developments highlight the broader and perhaps initially overlooked inflationary impact of the current environment. Higher energy prices feed into fertiliser production, transportation and processing costs, creating second-round effects that extend well beyond the energy complex.

A market adjusting to a more persistent shock

Across the commodity complex, the key takeaway is that the market is transitioning from an initial shock phase to a more prolonged adjustment.

Crude prices may respond quickly to headlines around escalation or de-escalation, but the underlying conditions—damaged infrastructure, disrupted trade flows and elevated costs—suggest that the effects of the current crisis will persist.

The divergence between sectors reflects this shift. Energy markets continue to price tight supply and physical disruption, while metals are adjusting to a more challenging macro backdrop. Agriculture and soft commodities are beginning to reflect the second-round effects.

Even if a ceasefire is reached and the Strait of Hormuz reopens, the path back to normal will likely be uneven. For now, the commodity complex remains supported by a combination of supply constraints and inflationary pressures, but the growing risk is that these same forces begin to weigh more heavily on global growth. In that sense, the market is no longer just trading a geopolitical event. It is increasingly pricing its economic consequences.

U.S. rate cut expectations have deteriorated in the last month, with market having almost removed the chance of a cut in 2026 - Source: Bloomberg
The stress in energy markets are primarily being felt across refined products and Middle East crude markets - Source: Bloomberg & Saxo
Gold is heading for a steep weekly decline but remains up 51% in the last year - Source: Saxo
Ole HansenHead of Commodity StrategySaxo Bank
Topics: Macro Federal Reserve Gold Inflation Copper Industrials Agriculture Silver Crude Oil Gas Oil Heating Oil Oil and Gas Oil Corn Wheat Natural Gas
WTO cuts global trade outlook, says Middle East conflict lifts energy risks

Posted on: Mar 20 2026

WTO cuts trade and growth outlook as Middle East conflict lifts energy risks.

Summary:

  • WTO cuts global trade and growth forecasts due to Middle East conflict

  • Goods trade growth seen at 1.4% vs 1.9% previously

  • Global GDP forecast lowered to 2.5% from 2.8%

  • Energy disruptions via Strait of Hormuz driving outlook downgrade

  • Higher oil and LNG prices weighing on demand and trade flows

  • Energy-importing regions face greater downside risks

  • AI-related goods accounted for 42% of trade growth in 2025

  • AI investment could partially offset downside risks in 2026

  • Services trade, including tourism, also expected to slow

  • Geopolitical uncertainty reshaping global trade patterns

The World Trade Organization has downgraded its outlook for global trade and economic growth, warning that a prolonged Middle East conflict could have a deeper-than-expected impact on the global economy. Gated: Wall Street Journal.

The revision follows escalating tensions involving Iran, including disruptions to energy production and shipping routes through the Strait of Hormuz, one of the world’s most critical arteries for oil and liquefied natural gas flows. Continued attacks on energy infrastructure, including key gas facilities in Iran and Qatar, have raised concerns about sustained supply disruptions and persistently high energy prices.

Under a scenario where the conflict continues through the remainder of 2026, the WTO now expects global goods trade to grow by just 1.4%, down from a previous forecast of 1.9%. Global economic growth is also projected to slow to 2.5%, compared with an earlier estimate of 2.8%.

The downgrade reflects the broader economic impact of elevated energy costs, which act as a drag on both consumers and businesses. Higher oil and gas prices raise input costs, reduce disposable income, and tighten financial conditions, particularly in energy-importing economies across Europe and Asia. By contrast, energy-exporting countries, including the United States, may see relative support to growth from higher commodity revenues.

The WTO warned that sustained energy price increases could have spillover effects beyond trade, including risks to food security and broader cost pressures across supply chains. At the same time, disruptions to transport routes in the Middle East are compounding uncertainty, further weighing on global trade flows.

Despite the weaker outlook, some offsetting forces remain. The WTO highlighted that AI-related investment continues to provide a meaningful boost to trade. In 2025, goods linked to artificial intelligence—such as semiconductors, chips and data infrastructure—accounted for 42% of global trade growth, despite representing a relatively small share of total trade.

While demand for AI-enabling goods is expected to moderate in 2026, the WTO noted that a sustained investment cycle could partially cushion the downside from geopolitical disruptions. In a more optimistic scenario, continued strength in AI-related trade could offset the drag from higher energy prices, leaving overall trade growth closer to previous expectations.

The conflict is also expected to weigh on services trade, particularly in sectors such as transport and tourism. Growth in global services trade is now projected at 4.1% if tensions persist, down from a prior forecast of 4.8%. Geopolitical uncertainty is likely to dampen travel demand and shift trade and tourism flows toward regions perceived as lower risk.

More broadly, the outlook underscores how geopolitical shocks in energy markets are feeding through the global economy. Disruptions to supply and transport are lifting energy prices, tightening financial conditions and reshaping trade patterns. The balance between these downside risks and ongoing structural drivers such as AI investment will be key in determining the trajectory of global growth through 2026.

This article was written by Eamonn Sheridan at investinglive.com.
Australia leading index steady. Growth outlook softens to below trend on rate hikes & war

Posted on: Mar 18 2026

Australia’s leading index holds just above trend, but momentum is fading as headwinds build.

Summary:

  • Westpac–Melbourne Institute Leading Index held at +0.08% in February (unchanged from January)

  • Down from +0.13% in September, signalling moderating momentum

  • Growth remains slightly above trend but losing pace

  • Financial components (ASX cooling) offset by commodities and hours worked

  • RBA rate hikes and Middle East conflict expected to weigh further

  • Westpac sees GDP slowing to ~2.0% in 2026 (from 2.5% in 2025)

Australia’s growth outlook is showing early signs of softening, with the Westpac–Melbourne Institute Leading Index holding steady at +0.08% in February on a six-month annualised basis, unchanged from January but down from stronger readings late last year.

The index, which provides a guide to economic activity three to nine months ahead, suggests that momentum remains slightly above trend in early 2026. However, the modest pace of growth and recent trajectory point to a gradual loss of momentum as headwinds begin to build.

The current reading marks a step down from +0.13% recorded in September, with the moderation largely driven by developments in financial markets. In particular, the contribution from the S&P/ASX 200 has weakened significantly, shifting from a positive +0.19 percentage points contribution to broadly neutral. Forward signals suggest equities may soon become a drag on the index, reflecting softer market sentiment and tighter financial conditions.

Partially offsetting this has been support from higher commodity prices and stronger hours worked, which have helped keep the index in positive territory. However, these supports may prove insufficient as broader macro pressures intensify.

Westpac expects the combination of recent interest rate hikes by the Reserve Bank of Australia and the economic fallout from the Middle East conflict to weigh more heavily on activity in the months ahead. Higher borrowing costs are already beginning to constrain demand, while elevated energy prices and global uncertainty are likely to dampen both business and consumer confidence.

As a result, Westpac forecasts Australia’s GDP growth to slow to around 2.0% in 2026, down from 2.5% in 2025, a pace considered below trend for the economy. While early signals of this slowdown are evident in the February reading, the impact is expected to become more pronounced in coming months as policy tightening and external shocks fully feed through.

In the current environment, the Leading Index underscores a key shift: while the Australian economy has remained resilient, the balance of risks is tilting toward slower growth. With financial conditions tightening and global uncertainties rising, the outlook is increasingly one of moderation rather than expansion.

This article was written by Eamonn Sheridan at investinglive.com.
DE 40 forecast: the index has fallen more than 10% from its peak

Posted on: Mar 17 2026

The DE 40 stock index failed to recover and entered a downtrend. The DE 40 forecast for today is negative.

DE 40 forecast: key takeaways

  • Recent data: Germany’s CPI rose 0.2% in February
  • Market impact: the data creates a neutral backdrop for the German stock market

DE 40 fundamental analysis

Based on the released statistics, the impact of this news on the DE 40 index will most likely be restrained and closer to neutral-to-positive. Germany’s monthly CPI increased by 0.2%, exactly in line with the forecast, while annual inflation in February came in at 1.9%, and the harmonised EU benchmark was 2.0%. In other words, the market did not get an inflation surprise. This is important for the stock market, as actual figures that match expectations typically do not provide a strong enough catalyst to trigger a broad rally or a sell-off in the index.

For the DE 40, the key is not only the 0.2% monthly figure itself, but how it is interpreted in the context of monetary policy. On the one hand, inflation remains close to a level that generally appears to be under control. On the other hand, the market has been assessing the situation in recent days against the backdrop of rising energy risks and more hawkish rate expectations in the eurozone.

Germany’s inflation rate m/m: https://tradingeconomics.com/germany/inflation-rate-mom

DE 40 technical analysis

The DE 40 index is forming a resistance level near 24,120.0, while the 23,585.0 support level has been broken, and a new one has yet to form. If the decline continues, the next downside target could be 22,435.0.

The DE 40 price forecast considers the following scenarios:

  • Pessimistic DE 40 scenario: if the price consolidates below the breached support level at 23,585.0, the index could fall to 22,435.0
  • Optimistic DE 40 scenario: a breakout above the 24,120.0 resistance level could propel the index up to 25,370.0
DE 40 technical analysis for 16 March 2026

Summary

For the German equity market, this is a moderately constructive signal, as inflation remains under control and in line with expectations. However, in the current environment, the impact of this data will be limited by external factors such as energy price movements, ECB rate expectations, and weakness in parts of Germany’s industrial sector. Therefore, the most likely market reaction is restrained and selective, with more resilient domestic sectors likely to perform better, while the export- and industry-heavy sector remains more sensitive to external risks. The nearest downside target remains 22,435.0.

Open Account

Editors’ picks

EURUSD 2026-2027 forecast: key market trends and future predictions

This article provides the EURUSD forecast for 2026 and 2027 and highlights the main factors determining the direction of the pair’s movements. We will apply technical analysis, take into account the opinions of leading experts, large banks, and financial institutions, and study AI-based forecasts. This comprehensive insight into EURUSD predictions should help investors and traders make informed decisions.

Gold (XAUUSD) forecast 2026 and beyond: expert insights, price predictions, and analysis

Dive deep into the Gold (XAUUSD) price outlook for 2026 and beyond, combining technical analysis, expert forecasts, and key macroeconomic factors. It explains the drivers behind gold’s recent surge, explores potential scenarios including a move toward 4,500 to 5,000 USD per ounce, and highlights why the metal remains a strong hedge during global uncertainty.