Asia Market Quick Take – 03 March, 2026

Asia Market Quick Take – 3 March, 2026

Key points:

• Macro: Iran declares Straits of Hormuz closed; Warns ships of attack
• Equities: US equities rebounded with defence and oil firms gaining; Palantir rose 5.8%
• FX: USD rises; G-10 currencies decline; CAD and AUD are least impacted
• Commodities: Silver reverses gains; gold steadies above $5,300; oil supply disrupted
• Fixed income: Iran conflict raises inflation fears; Treasury yields spike

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Trump warned of ongoing US attacks on Iran until it no longer posed a threat, indicating the conflict could last a month or longer. Iran declared the Strait of Hormuz closed, threatening vessels trying to pass through.
• The US may limit Nvidia's H200 chip exports to 75,000 units per Chinese firm, affecting market access. AMD's chips count toward this cap. Total shipments to China could hit one million, with restrictions impacting major tech companies.
• The ISM Manufacturing PMI rose slightly to 52.4 from January's 52.6, exceeding expectations of 51.8 in February. The increase was driven by a surge in prices paid, climbing to 70.5, the highest since June 2022. Order backlogs increased by 5 points to 56.6, the highest since May 2022. Employment improved slightly to 48.8, though still below the expansion threshold. However, new orders decreased to 55.8, and production fell to 53.5. Three demand indicators remain in expansion territory.
• Japan's unemployment rate increased to 2.7% in January 2026, higher than the forecast and the highest since July 2024. Employment decreased by 290,000, while the labor force fell to 70.08 million. The participation rate was 63.5%. The jobs-to-applicants ratio was 1.18.
• Germany's retail sales fell 0.9% in January 2026, missing the expected 0.2% drop, after a 1.2% rise in December. Non-food sales dropped 1.7%, while food sales were flat and e-commerce rose 2.5%. Yearly retail trade grew 1.2%, easing from December's 2.5% gain.
• Trump announced ongoing US combat operations in Iran, citing Iran's missile development capable of reaching America and its pursuit of nuclear weapons. He indicated operations are ahead of schedule and may extend the timeline as necessary.

Equities:

• US - US equities rebounded strongly on Monday, with a "buy the dip" strategy erasing earlier losses. S&P 500 closed slightly higher, the Dow fell 0.2%, and the Nasdaq turned positive after a 1.6% drop. Investorsfavored cash-rich tech giants like Nvidia and Microsoft, rising 2.9% and1.5% respectively.Defense and energy stocks, including Northrop Grumman (+6%) and Exxon Mobil (+1.1%), provided support as oil prices stayed high due to the Strait of Hormuz closure. Despite the ISM Manufacturing index rising to 70.5 and increasing inflation concerns, the market shrugged off geopolitical fears, with Palantir surging 5.8%.Nvidia is investing $2 billion each in Lumentum and Coherent to advance optics technology and datacenterarchitecture. Lumentum shares rose 11.75%, and Coherent shares increased 15.44%.
• EU - European stocks fell sharply on Monday, reversing last week's record highs due to Middle East conflict. The STOXX 50 dropped 2.5% to 5,987, and the STOXX 600 fell 1.5% to 624.European natural gas prices surged 50%, boosting inflation expectations and yields, pressuring banks like Santander and Intesa Sanpaolo, down 4%. Consumer discretionary and auto stocks, including Inditex and BMW, fell over 4-5% amid rising inflation concerns. Conversely, defense and energy shares rallied.
• HK - Hong Kong stocks dropped 2.5%, to 25,958, hitting a six-week low as sentiment turned negative. This followed slumps in U.S. futures due to President Trump's vow to continue military operations in Iran, raising concerns over Strait of Hormuz oil disruptions. Caution also rose ahead of China's February PMI data. Losses were slightly offset by mainland stock gains amid hopes for new support measures from the upcoming National People’s Congress. All sectors declined sharply, with consumer stocks down 1.9% and financials nearly 3%. Key laggards included SenseTime Group (-7%), Xiaomi (-4%), and Cathay Pacific (-3.6%).

Earnings this week:

• Tuesday - Target, Best Buy, AutoZone, CrowdStrike, Sea Limited, Box Inc, GitLab, Rayonier Advanced Materials, Paysafe
• Wednesday - Broadcom, Veeva Systems, Okta, Wix.com, Dycom, Stevanato Group, National Vision, Abercrombie & Fitch
• Thursday - Costco Wholesale, JD.com, Kroger, Marvell Technology, Samsara, Pattern Energy, Ciena, GoPro, American Eagle, Victoria's Secret
• Friday - Embraer, Algonquin Power, Genesco, Drilling Tools International

FX:

• USD surged nearly 1% on Monday amid rising US Treasury yields and surging oil prices, driven by escalating tensions in Iran. President Trump’s commitment to the Iran campaign heightened inflation concerns, impacting all G-10 currencies. 
• G-10 currencies declined, with CAD and AUD least affected due to commodities exposure. The EURUSD fell 1.03% to 1.1690, USDJPY rose 1.1% to 157.75, USDCHF increased 1.4% to 0.7798 and USDSEKrose to 9.1613. European currencies lagged, and the Swiss National Bank indicated readiness to intervene in currency markets.

Commodities:

• Silver fell over 6% to $88, reversing gains amid "risk-off" sentiment and a stronger US dollar. Initial Iran strikes boosted prices to $96.40, but concerns shifted to the economic impact of the Strait of Hormuz closure, affecting energy flows and reducing industrial demand for silver. Rising ISM index and Treasury yields increased silver's holding cost.
• Gold held above $5,300 after initial gains to $5,419. US stocks rallied, easing safe-haven demand, while expectations of more limited Hormuz impact and tech stock strength diminished gold's appeal. Rising Treasury yields supported the dollar, further capping gold's gains.
• Crude oil prices spiked due to Middle East tensions and the near halt of traffic through the Strait of Hormuz. Brent futures jumped 6.7% to $77.74 per barrel, and WTI gained 6.3% at 71.23 per barrel,impacting global energy markets. The ongoing US-Iran conflict and airstrikes disrupted oil supplies and increased inflation risks. Saudi Aramco halted operations at Ras Tanura refinery after a drone strike. Meanwhile, OPEC+ plans to increase production quotas.
• Gasoline futures surged 9% to $3 per gallon after US-Israel strikes on Iran, disrupting Hormuz oil flows. This rise poses political risks for President Trump ahead of midterms. Trump's influence on energy markets is limited, while prolonged Hormuz disruptions and the transition to summer-grade fuels add pressure.

Fixed income:

• The Iran conflict is boosting inflation worries in the Treasuries market, leading to bond selloffs. Treasury yields spiked, with the 10-year yield reaching 4.03%, as elevated oil prices reshaped rate cut expectations, pushing bets to September. Geopolitical tensions are diminishing Treasuries' safe-haven appeal despite previous bond rallies.

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