stabiliseDaily Market Outlook, March 4, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

President Trump’s proposal for the U.S. government to provide insurance for oil tankers navigating the Strait of Hormuz, along with naval escorts, appeared to partially stabilize U.S. equity markets. The S&P 500 rebounded approximately 1.5% from its intraday low, closing the session down by only about 1%. However, this stabilisation has not extended to Asian markets, which remain deeply in the red. South Korea’s Kospi is leading the decline, down 11% at the time of writing. Treasury yields, while below yesterday’s intraday peak, have begun to climb again. The simultaneous sell-off in bonds due to inflation fears and the drop in equities over concerns about economic growth highlight the ongoing turbulence in financial markets. The risk of rapidly evolving events continues to heighten volatility. As uncertainty lingers, market participants are increasingly contemplating the possibility that a significant energy shock may need to be factored into the global economic outlook. Despite the S&P 500 hovering near its 100-day moving average and 10-year U.S. Treasury breakeven inflation rates rising only about 5 basis points this week, there remains considerable downside potential in both equities and bonds. While crude oil prices have surged 15% to around $84 per barrel, this is only about $4 per barrel higher than last June’s spike linked to Israel’s brief strikes on Iran. As a result, other markets remain fixated on energy developments. Although natural gas prices have already seen larger moves, a more significant and sustained spike in oil prices—well above the five-year average of $80 per barrel—may be necessary for traders and investors to fully adjust asset allocations to reflect a gloomier economic outlook. For now, markets remain acutely sensitive to headlines about missile and drone strikes, as well as political statements from Trump and other key figures. Adding to the mix of challenges, private credit is beginning to show signs of strain, while concerns about AI-driven disruption are causing ripples across the software industry. Blackstone’s premier private credit fund experienced a significant spike in withdrawal requests during the first quarter, with investors pulling out a net $1.7 billion, according to a filing released on Monday.

The Spring Forecast concluded without significantly influencing the gilt market, a result anticipated by the Chancellor. This outcome likely would have held true even without the Middle East conflict diverting market focus. Several factors contributed to this muted impact. The headroom against the main fiscal rule saw only a modest upward revision of £1.9 billion, leading to a projected surplus of £23.7 billion in the current budget for 2029–30. Additionally, the cumulative revision to the government’s cash requirement from 2025-26 to 2030-31 amounted to -£12.5bn, a mere 1.6% of the original £777bn estimate for the period. The 2026-27 gilt remit was set at £252.1bn, closely matching both our forecast of £245bn and market consensus, while the structure of gilt issuance mirrored this year’s remit, aligning with expectations. This lack of surprises largely stemmed from minimal adjustments to the OBR’s economic forecasts. The OBR trimmed the 2026 GDP growth projection by 0.3 percentage points to 1.1%, but later years' upward revisions improved the outlook for tax receipts. This allowed the government to allocate an additional ~£4bn annually from 2028 onwards to address the financing shortfall identified by the OBR in its analysis of Special Educational Needs provision during the Budget. The Chancellor can take some comfort in being able to commit to higher spending while achieving a modest increase in fiscal headroom, even if it remains below the historical average.

Overnight Headlines

• Trump Says US Will Escort, Insure Oil Tankers Amid The Iran War

• Trump Open To Supporting Armed Militias In Iran, US Officials Say

• Israel Bombs Council Choosing Iran's Next Supreme Leader, Official Says

• Khamenei’s Son Is Leading Contender To Be Iran’s Next Supreme Leader

• Trump Says He’ll Cut Off Trade With Spain Over Air Base Use

• Fed's Williams Says Rate Cuts Still Possible, Does Not Address Iran War

• Kashkari Says Fed Can Sit Tight As War Clouds the Outlook

• China Factory Activity Contracts For Second Month In February

• China's Factory Activity Expands Most In Over 5 Years, Private PMI Shows

• Apollo’s Rowan Warns Of Shakeout Coming for Private Markets

• Australia’s Strong GDP Growth Keeps March RBA Hike In Play

• Poland Will Eventually Seek Its Own Nuclear Weapons, Tusk Says

• Goldman’s Solomon Surprised By ‘Benign’ Market Reaction To War

• Elon Musk’s SpaceX Is Said To Add Citigroup To IPO Bank Lineup

• Moderna To Pay About $1 Billion To Settle Arbutus Litigation

FX Options Expiries For 10am New York Cut 

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

• EUR/USD: 1.1600 (EU1.47b), 1.2000 (EU1.36b), 1.1750 (EU963.1m) 

• USD/JPY: 155.00 ($1.12b), 153.75 ($950.7m), 149.50 ($850m) 

• AUD/USD: 0.7125 (AUD898.9m), 0.7000 (AUD815m), 0.7075 (AUD550m) 

• USD/BRL: 5.1675 ($645.4m), 5.2900 ($455.1m), 5.1965 ($350m) 

• USD/CNY: 6.9150 ($896.2m), 6.8850 ($750m) 

• EUR/GBP: 0.8650 (EU936.8m), 0.8775 (EU733.9m), 0.8700 (EU612.7m) 

• GBP/USD: 1.3575 (GBP323.4m) 

• USD/CAD: 1.3800 ($352.9m), 1.3720 ($325m) 

• USD/MXN: 17.12 ($440m) 

• NZD/USD: 0.5450 (NZD300m)

CFTC Positions as of February 27, 2026: 

- S&P 500 CME net short: +14,318 contracts (465,965 total)

- S&P 500 CME net long: +36,890 contracts (1,005,549 total)

- CBOT US 5-year Treasury futures net short: -92,311 contracts (2,064,931 total)

- CBOT US 10-year Treasury futures net short: -103,833 contracts (774,020 total)

- CBOT US 2-year Treasury futures net short: +113,628 contracts (1,348,036 total)

- CBOT US UltraBond Treasury futures net short: +5,299 contracts (280,487 total)

- CBOT US Treasury bonds futures net long: -1,351 contracts (5,074 total)

- Bitcoin net long position: 1,172 contracts

- Swiss franc net short: -41,186 contracts

- British pound net short: -57,072 contracts

- Euro net long: 156,856 contracts

- Japanese yen net long: 11,539 contracts

Technical & Trade Views

SP500

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 6900 Target 7040

• Below 6850 Target 6600

EURUSD 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 1.1860 Target 1.1960

• Below 1.1685 Target 1.1515

GBPUSD 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.3635 Target 1.3760

• Below 1.3400 Target 1.3150

USDJPY 

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 156.30 Target 159.40

• 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 71k Target 75k

• Below 70k Target 53k