12/03/2026 Daily Reports
Oil Spike Above $100 Jolts Global Markets; Tech Earnings Lift Nasdaq as Defense Stocks Rally
- Global markets are navigating sharp energy-driven volatility as escalating Middle East tensions push oil prices sharply higher. In the U.S., the Nasdaq Composite is seeing mixed corporate-driven moves. PayPay Corporation priced its IPO at $16 per ADS and began trading under the ticker PAYP, while Oracle shares surged nearly 10% after reporting stronger-than-expected earnings and revenue. Meanwhile, Indivior announced plans to issue $400 million in convertible senior notes.
- European markets opened weaker as surging oil prices and inflation concerns pressured sentiment. Germany’s DAX declined at the open, though stock-specific moves stood out. Zalando jumped more than 10% after announcing a €300 million share buyback, while BMW fell after forecasting a moderate decline in pretax earnings this year.
- In Asia, Japan’s Nikkei 225 dropped 1.39% to 54,262 as rising energy costs and geopolitical risks weighed on equities. Several industrial names declined, but defense companies such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries outperformed as military tensions boosted the sector.
- Energy markets remain the central driver. Brent crude surged more than 5–9% during trading, briefly pushing back above $100 per barrel as attacks on cargo ships and fuel tankers threaten supply routes in the Strait of Hormuz. Prices continued rising despite the International Energy Agency announcing a record release of 400 million barrels from strategic reserves, underscoring persistent supply fears.
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FX Daily: Oil and Equity Volatility Push the Dollar Higher
- Oil Market Still Unstable
Despite the IEA’s release of 400 million barrels from emergency reserves and U.S. emergency measures to boost offshore production, oil markets remain tight. - New Supply Disruptions Add Pressure
Overnight developments intensified the situation:
– Oman evacuated key export terminals
– Two oil tankers were attacked in Iraqi waters
These events pushed Brent crude back near $100 per barrel. - Energy Rally Supports Commodity Currencies
Higher oil prices have strengthened USD, CAD, and AUD, as these economies benefit from their energy sector exposure.
Dollar Finds Support from Risk Aversion
- Equity Markets Turn Risk-Off
US and European equity futures indicate 0.5%–1% losses, which tends to support safe-haven demand for the US dollar. - Inflation Pressures Re-Emerging
Although recent US CPI data was relatively benign, rising gasoline prices suggest headline inflation could climb above 3% again.
EUR: Key Support Under Pressure
- 1.1500 Becomes a Critical Level
EUR/USD remains closely tied to oil price movements. Continued energy volatility could push the pair toward 1.1500 support.
GBP: Markets May Be Too Hawkish
- BoE Expectations Repriced Higher
UK rate markets have shifted significantly, with two-year swap rates rising about 50 basis points since the conflict began. - No Rate Cuts Expected Now
Markets are currently pricing no BoE easing this year, which may be overly aggressive.
AUD: Strong but Vulnerable
- RBA Rate Hike Bets Rising
Markets now see roughly a 70% probability of a 25-basis-point rate hike at the upcoming Reserve Bank of Australia meeting.
