Asia Market Quick Take – 19 March, 2026

Asia Market Quick Take – 19 March, 2026

Key points:

• Macro: Fed maintains rates. Middle east attacks further raisefears
• Equities: Equities fell across; Micron down 4.3% despite tripling revenue
• FX: USD rallies; USDJPY nears 160; CHF volatile awaits SNB decision
• Commodities: Gold -4%, sixth drop in a row, longest since late 2024
• Fixed income: Treasuries down; front end leads; first 25bp cut seen June 2027

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro: 

• The Fed maintained the federal funds rate at 3.5%–3.75% in March 2026, citing solid economic activity and elevated inflation amid uncertainty from the Iran conflict. One rate cut is expected this year and another in 2027. GDP growth forecasts were raised, while unemployment and inflation projections were slightly adjusted upward. Votes were 11-1 with unchanged dot plots. Powell stated the Fed won't overlook energy-induced inflation and discussed future rate hikes, though they aren't the base case for most.
• Middle Eastern energy attacks raised fears of global disruptions. Iran targeted a Qatari LNG plant after Israel struck Iran's South Pars field. Trump, aware of the Israeli attack, advised against further strikes and waived the Jones Act for 60 days to lower US transport costs.
• Japan's core machinery orders fell 5.5% to ¥982.4 billion in January 2026, better than the expected 9.6% drop. Manufacturing orders fell 12.5%, while non-manufacturing rose 6.8%. Private-sector orders rose 13.7% annually, exceeding forecasts. These orders are a key indicator of future capital expenditure.
• US producer prices rose 0.7% in February 2026, the largest increase in seven months, surpassing forecasts.Goods prices increased 1.1%, led by a 48.9% rise in vegetable prices. Service prices rose 0.5%, with traveler accommodation up 5.7%. Core PPI rose 0.5%. Annual headline producer inflation hit 3.4%, with core inflation at 3.9%.
• The Bank of Canada kept its overnight rate at 2.25% in March 2026, citing suitable policy amid Middle East conflict-induced energy price volatility. GDP contracted 0.6% in Q4 last year, and CPI inflation is expected to rise due to trade costs and higher energy prices, despite February's 1.8% inflation.

Equities:

• US - S&P 500 dropped 1.4%, the Nasdaq 100 fell 1.3%, and the Dow lost 1.6%. Many Fed officials projected no rate cuts in 2026, citing tariffs and elevated energy prices, while futures markets echoed doubts, especially after a hotter‑than‑expected PPI print. Rising energy prices—driven by new strikes by Israel on Iranian gas infrastructure and Iran’s retaliation on Qatar’s Ras Laffan gas hub —pushed yields higher and weighed broadly on stocks. Visa and Mastercard slid over 3%, Walmart and B&G fell more than 2.5%, while Micron finished flat ahead of earnings. In after hours, Micron fell 4.43% despite reporting revenue that tripled on memory chip demand.
• EU -The STOXX 50 fell 0.5% to 5,744, while the STOXX 600 dropped 0.7% to 598. Tech led the decline after early‑week outperformance, with SAP down 2.5% and Prosus sinking 7.4%. Higher natural gas prices pressured utilities, dragging Enel more than 3% lower while energy stocks led, with Maersk and Equinor gaining 1%-3%. UniCredit lagged peers as markets awaited updates on Commerzbank shareholders’ response to its $40 billion bid. 
• Asia – On Wednesday, Asian markets closed higher, driven by gains after the announcement of shareholder value enhancement measures. The KOSPI surged 5%, led by Samsung Electronics and SK Hynix, following reforms by the Financial Services Commission. The Nikkei 225 rose 2.9%, with several stocks reaching record highs. The Hang Seng Index was up 0.6%, marking its longest winning streak since January. The CSI 300 increased by 0.5%, while the ASX 200 edged up 0.3%. However,Asian markets fell on Thursday morning as Middle East tensions and rising oil prices hurt sentiment. KOSPI dropped 2.8%, Nikkei 225 slipped 2.4%, and ASX 200 lost 1.6%. Tencent ADRs fell 4.6% after earnings report shows buy backs will be cut to fund AI spend which is expected to double to 36b yuan.

Earnings this week:

• Thursday: AIA Group, Alibaba, Fed Ex, Accenture
• Friday:Xpeng, Meituan

FX:

• USD rallied after Fed Chair Powell's press conference maintained interest rates. Boosted by higher-than-expected US PPI data and Middle East tensions, DXY rose to 100.18.
• USDCAD increased 0.3% to 1.3725 after the Bank of Canada held its rate steady, as expected. 
• Current market focus is on possible Swiss National Bank action affecting Swiss franc volatility. EURCHF overnight volatility rose significantly as the pair traded below the 0.91 handle. USDCHF rose 1% to 0.7927, the weakest since January.
• EURUSD fell 0.6% to 1.1469. Spot and options volumes remain at 50%-60% of recent averages. 
• USDJPY climbed for the first time this week to 159.81, potentially approaching the key 160 level.

Commodities:

• Gold steadied near $4,835 after a near-4% plunge and six straight declines—the longest since late 2024—as the Fed held rates while signalling one cut this year, with Powell stressing more progress on inflation and officials warning the Middle East war and surging energy prices cloud the outlook.
• Oil climbed as attacks on key Middle Eastern energy sites raised disruption fears, with WTI up 3.4% to $98.69 in early Thursday trade and US natural gas up 4.7% after Iran hit a major LNG facility in Qatar and vowed more strikes following attacks on the South Pars field.
• Copper fell 3% in London after Iran warned it would target Gulf energy assets in retaliation for US‑Israel strikes on the South Pars field and Asaluyeh facilities, cautioning against approaching similar sites in Saudi Arabia, Qatar and the UAE.

Fixed income:

• Treasuries fell, led by the front end, after the Fed held rates 11–1, upgraded growth, and still pencilled one cut this year; Powell said cuts require more disinflation, didn’t rule out hikes, and vowed to stay until a successor is confirmed and the DOJ probe concludes. Fed‑dated OIS turned more hawkish, pricing ~16bp of cuts by year‑end vs 25bp Tuesday, with the first full 25bp of easing pushed to June 2027 from year‑end.

For a global look at markets – go to Inspiration.

This content is marketing content and should not be considered investment advice. Trading financial instruments carries risks and historic performance is not a guarantee for future performance. The instrument(s) mentioned in this content may be issued by a partner, from which Saxo receives promotion, payment or retrocessions. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.