If this is World War 3, the world wants .The greenback has is broadly higher but hardly anything else is. Other safe havens, like , the , and US Treasuries, are lower. Equity markets have been sold off and the rally in oil is taking a toll on bond markets.
The Middle East war is the only fundamental that matters now. And the fog of war makes it particularly difficult to get any meaningful perspective at the moment. With the decapitation strike, it is difficult to envision an off ramp or a near-term de-escalation. Uncertainty runs high. High-frequency economic data means little. Stick to one’s disciplined risk management may be the best advice under these conditions.
Prices
G10
• The was sold to almost $1.1670 in North America yesterday. It roughly corresponds to the low from January 22 and the 200-day moving average, which the euro has not settled below in a year. It held below $1.1710 in early Asia today before it took another leg down to almost $1.1580. Options for 1.8 bln euros at $1.1575 expire today.
• The dollar rose to JPY157.75 yesterday in North America, arguably helped by the nearly 12 bp jump in US . The greenback tested the high recorded last month. It has edged up to nearly JPY158 today. There is a band of congestion that extends from around JPY158 to January high near JPY159.45. The fear of intervention has waned.
• Last Thursday, recorded a bearish outside down day. It traded on both sides of the previous day’s range and settled below its low. Sterling consolidated ahead of the weekend and was sold aggressively yesterday. It reached about $1.3315 in late Asia Pacific activity. The recovery stalled near $1.3425 in Europe and it was re-tested in the North American morning. It has taken another leg down to almost $1.3265 today. The $1.3200 area corresponds to about a (38.2%) retracement of the rally from the January 2025 low (~$1.21). The lower Bollinger Band is found near $1.3345. And the three standard deviation mark from the 20-dfay moving average is around $1.3250.
• The US dollar fell to a two-week low against the ahead of the weekend, near CAD1.3625. It recovered to almost CAD1.3720 yesterday and stopped slightly shy of last week’s high (~CAD1.3725). It was again unable to settle above CD1.3700 despite the numerous intraday violations in the past couple of weeks. It is near yesterday’s high in late European morning turnover. Above CAD1.3725, the next target is around CAD1.3760.
• The traded in between about $0.7035 and $0.7115 yesterday. It settled firmly, near its opening level, and slightly above the pre-weekend low (~$0.7085). It also settled above the 20-day moving average (~$0.7065) as it has done since mid-January. Despite the hawkish comments from central bank governor Bullock, the Australian dollar is posting an outside down day. It has traded on both sides of yesterday’s range and is below yesterday’s low. Options for A$585 mln at $0.7020 expire today. A break of the $0.6990 area could spur losses toward $0.6955 and then $0.6900.
EM
• The dollar reached almost MXN17.40 yesterday, its best level in three weeks. The ’s nearly 0.55% loss still made it among the best performing emerging market currencies. Still, the dollar settled above MXN17.30, where the recent highs were recorded. Follow-through dollar buying lifted it a little almost MXN17.53 today. Last month’s highs were in the MXN17.56-7 area.
• The dollar rose almost 0.6% against the yesterday, its largest single day gain since last April. The dollar reached nearly CNH6.9135, its highest level since February 11. It settled above the 20-day moving average (~CNH6.8985) for the first time since last November. The greenback has risen to CNH6.9150 today. The next important chart area is near CNH6.95. The PBOC set the dollar’s reference rate sharply (~0.20%) lower today, CNY6.9088 (CNY6.9226 yesterday), which seems aimed at limiting the dollar’s upside/yuan’s downside.
• Before the weekend, the dollar fell to its lowest level against the Brazilian real since mid-2024 (~BRL5.1160). A poll last week showed Flavio Bolsonaro, the son of the jailed former president, was in a virtual tie with President Lula in a simulated run-off of the October election. In the dollar’s surge yesterday, the greenback reached BRL5.2140, a six-day high before it settled around BRL5.17. The central bank has signaled it will the 15% Selic rate when it meets again on March 18.
• Indian markets were closed for a national holiday.
Other Markets
• The equity sell-off is deepening today. Japanese indices were off 3%, but the biggest sell-off in the Asia Pacific region was the high-flying , which tumbled about 7.25%. Some smaller markets in the region managed to rise. Europe’s Stoxx 600 is down more than 3% and US index futures are down 1.7%-2.3%.
• Benchmark 10-year yields are jumping. The 10-year JGB yield is up nearly six basis points, and Australia’s 10-year yield rose nearly 14 bp. European yields are mostly 9-15 bp higher and the US 10-year Treasury yield is up almost seven basis points to 4.10%.
• Even gold is not acting as a haven today. After approaching $5420 yesterday, it is below $5200 late in the European morning. Silver is extending yesterday’s losses. It fell to around $86.50 yesterday and has frayed the $80 level today.
• April rose almost 6.3% yesterday and settled near $71.25. It is up almost 8% and traded above $77.25, though it is back below $77.00 near midday in Europe. Although the US is a large producer of oil, it is also an intense user. A preliminary review of US oil consumption per unit of GDP is higher than Japan, German, France, and the UK, but lower than Canada.
Data
• US February auto sales will trickle in over the course of the session. They are expected to have bounced back after an exceptionally poor January, which saw the seasonally adjusted annualized pace slump to 14.85 mln vehicles, the lowest since March 2023. Vehicle sales averaged about 16.12 mln a month in 2025 after 15.77 mln a month in 2024. The Fed’s Williams and Kashkari speak, as the Fed funds futures now fully discount the next cut in September from July.
• The eurozone preliminary February CPI was firmer than expected at 1.9% (from 1.7% in January). The core rate rose to 2.4% from 2.2%.
• Australia reported a A$21.1 bln Q4 current account deficit, and the Q3 shortfall was revised to A$18.3 bln from A$16.6 bln. Net exports subtracted 0.1% off GDP (-0.1% in Q3). Q4 25 GDP is due tomorrow and the median forecast in Bloomberg’s survey is for a 0.7% expansion after 0.4% in Q3 25. Separately, building approvals unexpectedly slumped 7.2% in January after a precipitous 14.9% slide in December 2025. RBA Governor Bullock warned that the central bank was running out of patience with inflation and that every meeting is live. The odds of a hike later this month (March 17) rose from less than 5% yesterday to 40% today.
• Japan’s unemployment rate ticked up to 2.7% in January from 2.6% in December. .6%, while the job-to-applicant ratio slipped to 1.18 from a revised 1.20 (from 1.19). Japan also reported that corporate profits rose 4.7% in Q4 25 year-over-year after a 19.7% surge in Q3 25. Capex increased 6.5% year-over-year, from 2.9% in Q3, and excluding software, it rose 7.3% (2.9% in Q3). It suggests that Q4 GDP may be revised higher next week from the initial estimate of 0.1% quarter-over-quarter.
