US sends unclear message on safety of Strait of Hormuz

US government figures have given mixed messages on whether the US Navy had actually escorted vessels through the Strait of Hormuz. Chris Wright, the energy secretary, said overnight that the US Navy had escorted an oil tanker through the chokepoint, sparking a rapid sell-off in oil prices. But that was denied later by the White House who said the military was still planning “additional options.”

The International Energy Agency has proposed a substantial release of oil from its member countries’ strategic petroleum reserves, at a larger scale than the 182m bbl released during the initial phases of Russia’s invasion of Ukraine. The plan is due to be discussed on 11 March 2026.

The Ruwais oil refinery in the UAE, one of the world’s largest with capacity of 922k b/d, has shut operations after a drone attack caused a fire at the site. The interruption to supplies is the latest direct impact on regional energy infrastructure caused by the war.

CPI inflation in Egypt ticked up to 13.4% y/y in February in data released on 10 March, up from 11.9% the previous month. This marked the fastest pace of annual price growth since July 2025, with prices rising 2.8% m/m, compared to 1.2% in January. The acceleration was largely due to the faster rise in food prices that traditionally accompanies the uptick in demand during the holy month of Ramadan, which began on 19 February. Food & non-alcoholic food prices, which account for nearly 40% of Egypt’s CPI basket, were up 4.6% y/y, from 1.9% in January.

Industrial production in Türkiye dropped by 1.8% y/y in January. Manufacturing activity contracted by 2.5% while mining and quarrying was lower by 2.8%. Utilities output was higher on an annual basis at 5.6%.

Today’s Economic Data and Events

16:30 US CPI m/m Feb: forecast 0.3%

16:30 US CPI y/y: forecast 2.4%

22:00 US federal budget balance Feb: forecast USD -310trn

Fixed Income

US Treasuries traded in a choppy session with the near-term effects of the war still very much in focus. After heading higher mid-way through the session, Treasuries pushed lower by the close with the 2yr UST yield ending the day at 3.59%, up by 5bps. The 10yr yield closed higher by nearly 6bps at 4.1557%.

Benchmark bond markets closed higher overnight with yields lower across all major European markets along with some relief in major emerging markets. Yields on 10yr lccy Turkish government bonds fell 67bps to 29.229% while South African ZAR yields were lower by 27bps at 8.514%.

Regional credit also tested higher overnight. Sovereign bonds across the GCC were higher by 0.6% overnight while sukuk added 0.3%. There was also widespread gains across geographies.

GCC CDS prices pulled lower overnight with Abu Dhabi 5yr at 40.7, Dubai at 72.9, Saudi Arabia at 78.9 and Qatar at 40.7.

FX

Currency markets remained choppy, tracking headlines more than underlying economic conditions. EURUSD fell 0.2% overnight to close at 1.1611 while USDJPY pulled higher by the same amount to close at 158.05. GBPUSD fell by 0.1% to 1.3418.

Commodity currencies showed more relief, though, led by the Australian dollar which rallied 0.6% to 0.712. CAD was marginally positive at 1.3580.

In emerging markets, the INR pulled back some recent losses with USDINR down 0.6% at 91.805 while TRY was flat at 44.0618 and the EGP recovered some of the heavier selling from earlier in the week, strengthening to 51.9963.

Equities

US equity markets showed little direction overnight with the Dow Jones near unchanged and the S&P 500 off by 0.2% while the NASDAQ closed virtually unchanged. European markets had a more positive session with the FTSE higher by 1.6% while the EuroStoxx was up by 2.7%.

Regional equity markets were led by the UAE with the DFM up just short of 2% and the ADX 15 adding 1.8%. It was the first positive close for both markets since the start of the war. Elsewhere the Tadawul gained 0.9% while markets were higher in Qatar and Kuwait as well.

Commodities

Oil prices are trading with enormous volatility and moving off the back of headlines only. On the later discredited news that the US Navy had escorted an oil tanker out of the Gulf, Brent prices slumped to USD 81/b before gaining back closer to USD 92/bin quick moves. Price action was similar in WTI with prices dipping to UDS 77/b before gaining again.

On the close, prices were substantially lower with Brent futures down 11.3% and WTI off by 11.9% at USD 87.80/b and USD 83.45/b respectively.

Metals prices were higher overnight with gold up 1% at USD 5,191/troy oz, pulling up the rest of the precious metals apart from palladium.