Daily Market Outlook, March 16, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Global equity markets showed signs of stabilization, while oil prices retreated from earlier highs after President Donald Trump urged international cooperation to ensure safe passage through the Strait of Hormuz. Trump also disclosed ongoing dialogue with Iran, although Iranian officials denied any requests for negotiations or a ceasefire. U.S. stock futures tied to the S&P 500 climbed 0.6%, hinting at a possible end to the index’s four-day losing streak following the president’s remarks. The MSCI All Country World Index, which tracks global equities, held steady after three straight days of declines. Asian markets edged up by 0.1%, while European stocks appeared poised for a positive start to the trading day. Investor sentiment improved further as the U.S. dollar weakened, with the DXY index slipping 0.2%. The dollar, which had gained traction as a safe-haven asset amid Middle East tensions, softened against most major currencies. Oil markets experienced volatility, with Brent crude hovering around $104 per barrel after briefly spiking to $106.50. The surge was triggered by U.S. strikes on Iran’s Kharg Island, a key hub for its oil exports. West Texas Intermediate crude remained below the $99 mark, reflecting a more subdued response. Contributing to the easing of tensions, Iranian Foreign Minister Abbas Araghchi clarified that the Strait of Hormuz was restricted only to vessels from "enemy" nations. In a sign of normalized activity, two tankers carrying liquefied petroleum gas successfully navigated the critical waterway en route to India, which handles approximately 20% of global oil shipments. The UK government is preparing to announce a support package aimed at a relatively small group of predominantly rural consumers who depend on heating oil. Since heating oil is not covered under the OFGEM price cap, this group has been directly impacted by sharp price increases. The intervention, expected to total £50 million, is not considered fiscally significant. The Chancellor still has some time to evaluate whether a broader policy response will be required, as the next energy price cap adjustment is not set to take effect until July.

In the coming week, eight central bank decisions will take place within the G10 space, with the Reserve Bank of Australia (RBA) being the only one anticipated to raise rates. Policymakers' statements will be closely analyzed for their approach to the emerging energy price shock. While the Federal Reserve (Fed) and the European Central Bank (ECB) will publish new quarterly projections, other central banks such as the Bank of England (BoE) and the Bank of Canada (BoC) are holding off-cycle meetings amid heightened uncertainty. Guidance is expected to remain limited, maintaining a focus on inflation control, with more detailed plans likely to be revealed in future meetings. The Federal Reserve may revise its projections to reflect upward pressure on the 2.4% PCE inflation forecast for 2026, though estimates for 2028 and beyond may remain at 2%, albeit with potential upside risks. Recent favorable CPI data and a negative payroll figure suggest Chair Powell will adopt a balanced stance. Notably, only three upward adjustments in the 'dots' would shift the implied end-2026 Fed Funds rate from one cut to 3.625%, or leave it unchanged at the current level. The European Central Bank is expected to maintain a hawkish tone, with President Lagarde emphasizing the commitment to avoid a resurgence of 2022-23 inflation levels. Updated staff projections will likely incorporate scenario analyses of the energy price shock, highlighting the trade-off between inflationary pressures and growth risks. These factors may be formally reflected in the risk assessment section, moving away from the previously described ‘broadly balanced’ risks. The Bank of England is unlikely to consider a rate cut at this meeting. Some of the four dovish dissenters on the Monetary Policy Committee may temporarily withdraw their positions, given that reduced inflation expectations are less plausible with oil prices near $100 per barrel. This non-Monetary Policy Report, non-press conference meeting is expected to emphasize uncertainty and a measured, deliberate approach rather than reactive decision-making. The Bank of Japan, not scheduled for a quarterly forecast update, is likely to maintain cautious communication. However, given its intent to tighten policy, the ongoing energy crisis could serve as an opportunity to prepare markets for a potential rate hike in April, possibly lifting the policy rate to 1%. The Swiss National Bank is expected to focus on currency intervention rather than interest rate changes, as the Swiss Franc's appreciation since December has contributed to disinflation. With inflation near zero, the SNB is unlikely to return to a negative interest rate policy, opting instead to mitigate imported deflation risks. A 25-basis-point hike by the Reserve Bank of Australia to 4.10% appears likely, driven by hawkish remarks from the Deputy Governor. Rising oil prices, which may push inflation above the RBA's 4.2% forecast, have heightened concerns about the detrimental effects of high inflation. This may indicate a more aggressive tightening stance, challenging the notion that an early March hike simply shifts tightening from later months. The Bank of Canada, awaiting another labor market report before its decision, is expected to maintain policy flexibility amid geopolitical uncertainties. As this meeting does not include quarterly projections, no rate change is anticipated, and guidance is likely to remain non-committal.

Overnight Headlines

• Oil Surges As Kharg Attack Raises Stakes In Mideast Conflict

• IEA Says Asia To Release Emergency Oil Stocks Immediately

• Japan Starts Release Of Oil From Reserves As War Snarls Flows

• Trump Demands Help From Other Countries To Secure Hormuz

• EU Ministers To Discuss Possible Naval Options For Strait Of Hormuz

• Iran Tests NATO’s Boundaries With Missiles Fired At Turkey

• US Treasuries Erase 2026 Gains As Inflationary Angst Rises

• Bond Market In Oil’s Grip Ponders Shifting Focus To Growth Worry

• Gold Steadies As Oil Jumps, Mideast Conflict Enters Third Week

• China’s Economy Gets Off To Better-Than-Forecast Start To Year

• Japan’s Katayama Says Ready To Take Bold Steps On FX As Needed

• UK Inflation Risk Looks More 2011 Than 2022 For Bank Of England

• Energy Groups Press UK To Boost Gas Storage After Iran War Price Shock

FX Options Expiries For 10am New York Cut 

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

• EUR/USD: 1.1350 – €571 million | 1.1375 – €600 million | 1.1450 – €543 million | 1.1500 – €1.6 billion | 1.1550 – €732 million | 1.1575 – €822 million | 1.1600 – €1.9 billion

• USD/JPY: 160.00 – $953 million

• GBP/USD: 1.3425 – €1.0 billion

• USD/CAD: 1.3630 – $710 million | 1.3900 – $542 million

• AUD/USD: 0.6850 – A$775 million | 0.6900 – A$940 million | 0.6950 – A$713 million | 0.6975 – A$578 million | 0.6985 – A$555 million | 0.7100 – A$1.5 billion | 0.7150 – A$681 million

CFTC Positions as of March 13, 2026: 

• Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 173,130 contracts, bringing it down to 1,917,664 contracts. Similarly, the net short position in CBOT US 10-year Treasury futures has been decreased by 119,624 contracts, now totaling 534,883. The net short position for CBOT US 2-year Treasury futures has seen a minor reduction of 305 contracts, reaching 1,338,236. In contrast, speculators have increased their net short position in CBOT US UltraBond Treasury futures by 34,408 contracts to a total of 290,102. There has also been a rise in the net long position for CBOT US Treasury bonds futures by 21,772 contracts, bringing it to 42,037. 

• The Swiss franc has a net short position of -41,092 contracts, while the British pound shows a net short position of -84,197 contracts. On the other hand, the Euro has a net long position of 105,144 contracts, and the Japanese yen records a net short position of -41,387 contracts.The net long position for Bitcoin stands at 1,302 contracts

Technical & Trade Views

SP500

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 6800 Target 6920

• Below 6700 Target 6500

EURUSD 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.1675 Target 1.1730

• Below 1.15 Target 1.1410

GBPUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.3450 Target 1.3550

• Below 1.3400 Target 1.3150

USDJPY 

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 159 Target 161.50

• Below 155 Target 152

XAUUSD

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 5150 Target 5325

• Below 5200 Target 4900

BTCUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 78k Target 81.5k

• Below 75k Target 53k