Asia Market Quick Take – 16 March, 2026

Key points:

• Macro: Trump plans coalition to guide ships through Straits of Hormuz
• Equities: Meta plans lay-offs affecting at least 20% of staff
• FX: USD strengthens on risk aversion; USDJPY above 159 amid intervention speculation
• Commodities: Gold hovers near $5,000 as oil holds around $100
• Fixed income: US Treasuries extended weekly losses; Australia’s curve steepened

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US strikes hit Kharg Island as the Middle East conflict persisted. Trump warned Iran's energy infrastructure could be targeted if the Strait of Hormuz stays closed. While traders await a US-led coalition to escort ships, the IEA said oil from a record reserve release will soon reach Asia, underscoring supply pressure.
• Trump claimed Iran’s new Supreme Leader Khamenei may be dead, said it’s unclear if Iran mined the Strait of Hormuz, and added he isn’t ready for a deal with Tehran. He said strikes destroyed most of Kharg Island and suggested hitting it again “just for fun.”
• The University of Michigan Consumer Sentiment Index dropped to 55.5 in March 2026 due to the US-Iran conflict and rising gas prices, marking a three-month low. Nationwide personal finance expectations fell 7.5%, while inflation expectations held at 3.4%.
• US GDP grew an annualised 0.7% in Q4 2025, revised down from 1.4% and the weakest since Q1’s contraction, amid lower exports, consumption, government spending and investment, while imports fell by less than first estimated.

Equities: 

• US - US equities ended a difficult week lower, with the S&P 500 down 0.6%, the Dow off 0.3%, and the Nasdaq 100 slipping 0.7%. Defense Secretary Pete Hegseth announced the largest US strikes on Iranian targets, reinforcing the Hormuz blockade and heightening stagflation fears. Investors shifted into the dollar as indexes headed for a third week of losses and energy costs pushed 2026 rate expectations higher. Yields rose despite weak Q4 GDP, while software names fell, led by Adobe’s 7.6% drop on weak guidance and its CEO’s exit.
• EU - The STOXX 50 fell 0.6% to finish the week flat, while the STOXX 600 slipped 0.5% for a 0.5% weekly decline. Eurozone bond yields jumped toward 15‑year highs as the Iran conflict drove fresh energy supply shocks. Banks continued to slide on expectations of an ECB rate hike, with Deutsche Bank down 5.5% for the week and UniCredit off 4%. Higher yields also weighed on discretionary and industrial names, including LVMH, Siemens, and Schneider.
• Asia - Hang Seng fell 1.0% to 25,466 on Friday, marking its third straight decline and a 1.1% weekly drop as selling pressure broadened across sectors. Sentiment weakened after U.S. futures slid and Middle East tensions persisted, with Tehran threatening disruption in the Strait of Hormuz, keeping crude prices elevated. Major laggards included Zijin Gold, Minimax, Knowledge Atlas, and AIA. The Nikkei 225 fell 1.16% to 53,820 and the Topix slipped 0.57% to 3,629 on Friday, extending losses as surging oil prices and Wall Street weakness weighed on sentiment. BOJ Governor Ueda warned that a weaker yen could worsen imported inflation, potentially speeding policy normalization. Advantest (-3.5%), SoftBank Group (-4.5%), Tokyo Electron (-3.6%), Toyota Motor (-2.8%) and Honda Motor (-5.6%).

Earnings this week:

• Tues: Tencent music entertainment, Lululemon, Docusign, Oklo,
• Wednesday: Geely Auto, Tencent, Geely, micron,
• Thursday: AIA Group, Alibaba, Fed Ex, Accenture
• Friday: Xpeng, Meituan

FX:

• USD strengthened against G10 currencies largely due to risk aversion related to the ongoing Middle East conflict. Despite several US economic data releases, including disappointing Q4 GDP and durable goods figures, reactions were limited. The upcoming FOMC meeting, amid potential energy-inflation concerns, could further influence Dollar movement. DXY rose to above 100 level.
• Most G10 currencies were hit by USD strength and risk sentiment. GBP weakened below 1.33 due to weak UK GDP data, while AUD was pressured by risk aversion and declining metal prices ahead of an expected 25bps rate hike by the RBA. AUDUSD traded near 0.70.
• CAD fell after a dismal jobs report showed rising unemployment and declining employment numbers.
• JPY outperformed on speculation of possible intervention, with the USDJPY trading above 159 in the intervention zone. Japan's Finance Minister indicated readiness to act, though intervention seems unlikely due to geopolitical factors.

Commodities:

• Gold slipped below $5,000 an ounce as the Middle East war entered a third week and oil spiked after weekend attacks on critical energy infrastructure, with bullion down as much as 1% in early trade after a second weekly decline. Higher energy costs and inflation worries have dampened expectations for rate cuts by the US Federal Reserve and other central banks.
• Oil erased early gains as traders assessed supply risks after US strikes on military sites on Kharg Island, Iran’s main export hub, with Brent around $103 after an intraday rise of up to 3.3% and WTI near $98, while futures have jumped more than 40% in two weeks amid Iran’s retaliatory attacks on Israel and Arab states.

Fixed income:

• US Treasuries extended weekly losses at the long end while the front end was broadly steady, with oil setting the tone; markets largely shrugged off data, with PCE in line and GDP revised lower. Australia’s curve steepened as the RBA began a two‑day meeting, with OIS implying roughly two‑thirds odds of a 25bp hike on Tuesday, while in Japan the BOJ will buy notes maturing in one to 10 years and bonds beyond 25 years, and the Ministry of Finance will auction ¥800bn of December 2045s on Tuesday.

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