Market Quick Take – 20 March 2026

Market drivers and catalysts

• Equities: US losses narrowed as oil eased, while Europe and Asia sold off harder on energy-driven inflation fears.
• Volatility: VIX elevated but easing, triple witching and macro risks keep markets sensitive
• Digital Assets: crypto stabilising, ETF outflows persist, bitcoin resilient, ethereum weaker
• Fixed Income: US treasury yield curve flattens after volatile day. European short yields surge post-ECB
• Currencies: USD weakened sharply Thursday but has bounced. CHF weaker, NOK surging on energy prices.
• Commodities: A volatile week sees strong energy gains offset by long liquidation across previously high-flying metals, including gold, silver and copper
• Macro events: Canada Jan. Retail Sales, US Fed’s Bowman & Waller to speak

Macro headlines

• Energy prices eased after the U.S. and Israel sought to reassure investors unsettled by the latest escalation, in which reciprocal attacks between Israel and Iran damaged key energy infrastructure in the Persian Gulf. Despite the calmer price action, concerns remain that the impact of the conflict will be felt long after hostilities eventually subside. The disruption has already led to an unprecedented supply shock, with producers across the Gulf collectively shutting in around 10 million barrels per day of output. This has intensified global inflation pressures while simultaneously raising concerns about slowing economic growth.
• PM Netanyahu stated Iran lacks the capacity to enrich uranium or make ballistic missiles, sparking optimism for nearing goals and suggesting the war may end soon. However, he noted the continued pursuit of IRGC leaders, indicating the campaign may take time.
• The ECB maintained rates in March 2026 to stabilise inflation at 2%. The Middle East war raises inflation risks and growth uncertainties. Inflation is forecast at 2.6% in 2026, while GDP growth is expected at 0.9% due to the war's impact.
• The Bank of England held the Bank Rate at 3.75% in March 2026 due to rising energy and commodity prices from the Middle East conflict. February's inflation was 0.1%, but CPI could reach 3%-3.5% soon. The MPC monitors potential wage and price effects, ready to adjust policy for stability and growth.
• Swiss National Bank maintained its policy rate at 0% in March 2026, with a 0.25% discount above a threshold for sight deposits. It may intervene in currency markets to prevent Swiss franc appreciation amid Middle East conflict. Inflation rose to 0.1% in February, with forecasts of 0.5% for 2026-2027 and 0.6% for 2028. Rising energy costs and geopolitical tensions increase uncertainty, though Switzerland's GDP rebounded in Q4 and is expected to grow 1% in 2026.
• US new home sales dropped 17.6% to 587,000 units in January 2026, the sharpest decline since 2013 and lowest since 2022, despite low mortgage rates. Aggressive winter storms hindered viewings, affecting sales in the Northeast (-44%), Midwest (-33.9%), West (-21.6%), and South (-8.1%).
• US bank regulators proposed new rules easing large bank capital requirements. The Fed's revised GSIB surcharge would lower the biggest banks' capital by 3.8%, with overall changes reducing capital by 4.8%.

Macro calendar highlights (times in GMT)

0700 – UK Feb Public Sector Net Borrowing
1200 – US Fed’s Bowman to Speak
1230 – Canada Jan. Retail Sales
1230 – US Fed’s Waller to Speak

Earnings next week

• Tuesday: GameStop
• Wednesday: PDD Holding, Paychex
• Friday: Carnival

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: The S&P 500 fell 0.3% to 6,606.49, the Nasdaq slipped 0.3% to 22,090.69, and the Dow lost 0.4% to 46,021.43, but all three finished well above their intraday lows as oil pulled back after Washington moved to ease supply strains around the Strait of Hormuz. The Fed’s hawkish hold still weighed on sentiment, with traders pushing rate-cut hopes further out. Micron dropped 3.8% as investors focused on heavier spending plans and a forecast that failed to clear very high expectations, Nvidia fell 1.0%, and Tesla lost 3.2% after U.S. regulators expanded a probe into Full Self-Driving. FedEx then rose about 9.4% after hours on better earnings and higher guidance.
• Europe: The Euro STOXX 50 dropped 2.1% to 5,613.83 and the STOXX 600 fell 2.4% to 583.73, both to their lowest levels since December, as the European Central Bank warned that the Middle East conflict could worsen inflation and markets shifted to price rate hikes instead of cuts. The move hit cyclicals, banks and miners, while energy stayed the only real shelter. Prosus fell 6.0% as Tencent’s bigger artificial intelligence spending plans hurt sentiment, UniCredit lost 2.9% as investors kept weighing its Commerzbank bid in a rougher tape, and Siemens Energy fell 4.2% as industrial names led the retreat. Markets now watch whether cooler oil can stop Europe’s rate outlook from turning even tighter.
• Asia: Asia took the harder hit from the oil shock. Japan’s Nikkei 225 fell 3.4% to 53,372.53, South Korea’s KOSPI lost 2.7% to 5,763.22, and Hong Kong’s Hang Seng dropped 2.0% to 25,500.58, as investors priced slower growth and stickier inflation from higher energy costs. Tencent slid after saying artificial intelligence investment will rise again this year, a message the market read as stronger spending and fewer buybacks in the near term, while Alibaba’s U.S.-listed shares later fell more than 6% after earnings missed on soft commerce demand despite solid cloud growth. The question now is whether Asia’s artificial intelligence-led earnings story can keep doing the heavy lifting if oil stays high.

Volatility

• Volatility eased slightly into Friday, but remains elevated. The VIX closed at 24.06 on 19 March (−1.03), while shorter-term measures also declined, with VIX1D at 20.72 and VIX9D at 24.09, suggesting some near-term event risk has faded but not disappeared. For investors, the broader picture is unchanged: markets are still adjusting to a cautious Federal Reserve, elevated oil prices, and ongoing geopolitical tensions in the Middle East. Today’s triple witching — when stock options, index options and futures expire together — could add to volatility, particularly into the US close, as large positions are rolled or unwound.
• From options pricing, the S&P 500 is expected to move about ±63 points today (≈0.95%), while earlier in the week the market had been pricing closer to ±99 points (≈1.49%) into this expiry, indicating some premium has already come out. A look at today’s options chain shows no strong demand for downside protection, with near-the-money calls slightly firmer than puts, pointing to a mild upside skew rather than defensive positioning. That said, this balance can shift quickly if oil markets or geopolitical headlines surprise.

Digital Assets

• Digital assets are stabilising after a volatile week, but remain closely tied to the broader macro environment. Bitcoin is trading around $70,400, Ethereum near $2,130, Solana around $88–89, and XRP close to $1.45, reflecting a market that has steadied but not fully regained momentum. The recent pressure came from a combination of rising oil prices and a more cautious Fed outlook, both of which tend to weigh on risk appetite. While oil has eased slightly, the underlying uncertainty remains, keeping crypto markets sensitive to macro developments.
• Flows into crypto ETFs continue to show a more cautious tone. Recent data indicate net outflows from both bitcoin and ethereum ETFs, with IBIT seeing moderate outflows and ETHA experiencing more pronounced selling pressure. This divergence reinforces a familiar pattern: Bitcoin is holding up relatively well, while Ethereum and broader altcoins remain more vulnerable when sentiment weakens. For investors, that suggests the market is not yet in a full risk-on phase, but rather in a stabilisation period where confidence is still rebuilding.

Fixed Income

• A volatile day for US treasuries on Thursday, as selling in short dated US treasuries looked almost panicky at one point as the benchmark 2-year yield spiked to 3.95% after starting the day at 3.77%, but a rally took the yield back to 3.79%, while at the longer end of the curve volatility was far more muted, perhaps on growth concerns from higher oil prices. The benchmark 10-year treasury yield rose clear of the range since last August, posting a 4.32% high, but ended the day below the Wednesday close and traded near 4.25% at the close on Thursday, a drop of 1.5 basis points. The benchmark 30-year yield closed Thursday more than four basis points below the Wednesday close, ending the day below 4.84% as the yield curve flattened.
• Europe’s short yields jumped higher in the wake of the ECB meeting Thursday, with the benchmark 2-year German Schatz up over 14 basis points on the day to 2.59%, its highest level since July of 2024, while the 10-year benchmark 10-year German Bund yield rose some seven basis points and above 3.00% intraday on Thursday – the first time it has risen above that level since a one-off test of that level in 2023 and before that not since 2011 – but closed the day only two basis points higher at 2.96%.
• Japan’s government bond yield curve steepened in the wake of the BoJ meeting, with the benchmark 2-year JGB yield up just under two basis points to 1.274% while the benchmark 10-year JGB yield rose nearly 6 basis points to just below 2.28%

Commodities

• The Bloomberg Commodity Total Return Index (BCOMTR), which tracks a basket of 26 major commodity futures, trades down 1% on the week but remains up around 10% on the month. Continued strength in energy—led by diesel (with additional strong gains in jet fuel, fuel oil and EU gas not captured by the index)—has been offset by a sharp correction across previously high-flying metals, including gold, silver, copper and aluminium. The agriculture sector has posted a modest gain, with strength in wheat, sugar and cotton partly offset by weakness in soybeans. Overall, the BCOMTR, which is tracked and traded by several ETFs, is up 22.7% year-to-date, outperforming other major asset classes by a wide margin.
• Crude oil trades lower after Israel signalled it will refrain from targeting Iran’s energy infrastructure, following the backlash from earlier strikes on gas facilities that triggered retaliatory attacks and damage to key Persian Gulf assets—including extensive damage to Qatar’s largest LNG facility, which may take years to fully restore. The U.S. administration also helped narrow the historically wide WTI–Brent discount after confirming that an export ban is not under consideration. For now, however, only a ceasefire and the reopening of the Strait of Hormuz are likely to prevent another tight supply-driven rally across crude and refined fuel products.
• Gold is heading for its biggest weekly loss in six years, pressured by rising inflation concerns that are reducing rate cut expectations and pushing long-end yields higher. Weakness has been acerbated by selling from leveraged funds after the technical break below USD 5,000 triggered a wave of technical long liquidation. There is also emerging—though still secondary—speculation that surplus economies, particularly in the Middle East, may need to raise liquidity through asset sales, potentially including gold, as revenues come under strain.

Currencies

• The US dollar weakened as risk sentiment steadied and the spike in US treasury yield retreated Thursday, with EURUSD rising from a 1.1443 low to above 1.1600 at one point before retreating back into the 1.1560’s early Friday. USDJPY posted a sharp sell-off after the BoJ meeting decision and especially after BoJ Governor Ueda’s press conference Thursday, falling as low as 157.51 before rebounding to 158.40 early Friday.
• EURCHF rose clear of 0.9100 and posted its highest close in three weeks above 0.9130 as EU rates jumped higher after the ECB meeting Thursday and the SNB at its meeting earlier Thursday said that currency intervention would be its policy of choice if CHF strengthened excessively.
• EURNOKpushed below 11.00 for the first time since early 2023 as the oil and gas price spikes due to the war in Iran will provide a huge revenue boost for Norway and boost economic activity.

For a global look at markets – go to Inspiration.