10/03/2026

BIZ & FINANCE TUESDAY | MAR 10, 2026

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Governments scramble to limit fallout of Iran war

the Strait of Hormuz. This oil shock won’t end until ships can sail freely through the Strait,“ said Ed Yardeni of New York-based Yardeni Research. “Until then, the financial markets are likely to become increasingly concerned about a 1970s-style stagflation scenario,“ he said, where growth stalls even as prices rise. The two-year US Treasury yield, which is highly sensitive to Fed policy expectations, gained 5.9 basis points to 3.6146%, after rising over 17 bps last week. German and French debt futures also slid yesterday, suggesting the selloff will extend into Europe. Bund futures were down 0.46%, while French OAT futures fell 0.67%. – Reuters Equities dive as energy prices soar HONG KONG: Stock markets plunged yesterday as oil and gas prices soared on fears about supplies from the Middle East with the US-Israeli war against Iran continuing into a second week with no sign of letting up. Investors, already spooked by concerns over extended tech valuations and the huge spending on AI, ran for the hills as crude rocketed to its highest level since the Russian invasion of Ukraine in 2022. Seoul, which had been the best performer this year thanks to a tech rally, tumbled more than 8% at one point before closing 6% down, while Tokyo shed more than 5% and Taipei fell more than 4%. Hong Kong, Shanghai, Sydney, Singapore, Manila, Bangkok, Mumbai, Jakarta and Wellington were also sharply lower. London, Paris and Frankfurt opened on the back foot. “Stocks continue to face stiff headwinds, with markets in Europe and Asia, specifically Japan, more vulnerable in the short-term given that those are heavy energy importers, and with those markets having vastly outperformed the US year to date, until the Iran war begun,“ wrote Pepperstone’s Michael Brown. Futures for all three main indexes on Wall Street were down more than 1%, while the dollar jumped against its peers as traders sought out its safe haven status. The prospect of interest rates being kept elevated, or even raised to combat inflation, saw gold prices sink more than 1% to around US$5,100 an ounce. “The deeper shock is spreading across the production chain,“ said SPI Asset Management’s Stephen Innes. “Gulf producers are scaling back output because storage hubs are filling up and export flows are seizing. “Qatar has halted liquefaction at key gas facilities, a move that will take weeks to reverse even if the conflict cools tomorrow. “In other words, the market is not dealing with a headline shock. It deals with a physical disruption of oil molecules. “Oil above US$100 is not just a commodity rally. It becomes a tax on the global economy.” Michael O’Rourke at JonesTrading warned that the pain for investors could last for some time. “The worst is yet to come in the stock market reaction,” he said. “I would expect more of a risk-off mood until we get some tangible positive news.” Compounding the downbeat mood was news Friday that the US economy unexpectedly lost jobs in February, while unemployment edged up. – AFP

Across Asia, which sources 60% of its oil from the Middle East, equities slid and the dollar rose as worries grew that the disruption in energy supplies could be prolonged. Iran yesterday named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, a move that is expected to draw Trump’s ire. Weekend attacks on Iranian oil storage facilities fuelled fears of retaliatory strikes on energy facilities. In Bahrain, Bapco Energies declared force majeure yesterday following an attack on its refinery complex, the company said. “Oil prices have now gathered all the ingredients for a perfect storm – Middle East Gulf producers cutting output, the prolonged closure of the Strait of Hormuz ... all compounded by a growing pessimism about a quick turnaround in the current situation,” said Kpler senior oil analyst Muyu Xu. Iraq cut oil production at its main southern oilfields by 70% to 1.3 million barrels per day, three industry sources said on Sunday, while Kuwait Petroleum Corp began cutting oil output on Saturday and declared force majeure. No. 2 LNG exporter Qatar has already halted exports of the superchilled fuel and analysts predict that the United Arab Emirates and Saudi Arabia will also have to cut output soon as they run out of oil storage due to the Strait of Hormuz closure. – Reuters

national oil reserve storage site to prepare for a possible crude release, although the country’s chief cabinet secretary later said no decision had been made to release stockpiles. Japan imports around 95% of its oil from the Middle East. It has reserves to cover 354 days of consumption. Elsewhere, Vietnam removed import tariffs on fuels and Bangladesh shut universities to conserve electricity and fuel, while China last week asked refiners to halt fuel exports and try to cancel shipments that were already committed. President Donald Trump tried to downplay concerns about rising US gasoline prices, which were up 11% for the week on Friday, while Senate Minority Leader Chuck Schumer called on him to sell oil from the Strategic Petroleum Reserve. “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump posted on Truth Social on Sunday night. “ONLY FOOLS WOULD THINK DIFFERENTLY!” Oil jumped 25%, with Brent on track for a record one-day gain, while OPEC producers Kuwait and Iraq cut output over the weekend as the crucial Strait of Hormuz remained effectively shut.

o Oil jumps 25% after key producers cut output, Tehran taps new leader SINGAPORE: Governments scrambled to limit the impact on economies and consumers from the widening Iran war, which fuelled a record surge in oil prices yesterday after key producers cut output and Tehran signalled that hardliners would remain in charge. In a sign of mounting governmental concern over supply disruptions, the Group of Seven finance ministers will discuss the possibility of a joint release of emergency oil reserves in a meeting this week, a French government source said. In South Korea, which buys 70% of its oil from the Middle East, President Lee Jae Myung said Seoul would cap fuel prices for the first time in nearly 30 years and he warned against panic buying. Speaking at an emergency meeting, Lee called the crisis “a significant burden on our economy, which is highly dependent on global trade and energy imports from the Middle East”. A senior Japanese member of Parliament on Sunday said the government had instructed a

A motorcyclist leaves the gas station after refuelling his vehicle in Taiwan capital Taipei. – REUTERSPIC

From Tokyo to Sydney, bonds plunge on inflation fears SINGAPORE: Bonds across the globe sank yesterday as a rapidly worsening US-Israeli war with Iran pushed oil prices well above US$115 per barrel, spurring investor fears over inflation risks and what it could mean for the interest rate outlook. Asset Management, noting that higher oil prices are a drag to future global growth and can be inflationary. limit the impact on economies and consumers, with South Korea aiming to cap fuel prices for the first time in nearly 30 years.

Three-year Australian government bond yields surged 16 basis points to 4.592%, the highest since mid-2011. Ten-year government bond yields gained 13 bps to 4.977%. Bond yields rise when prices fall. In Tokyo, Japanese government bond yields jumped across the curve, with the yen also feeling the pressure from the jump in oil prices. In the broader market, investors sold stocks as well as precious metals, turning risk averse with the US dollar gaining favour. “This chaos in the financial markets is all about

The spectre of rising inflation and the possibility of central banks needing to keep rates higher for longer or even hike borrowing costs has meant the safe-haven allure of bonds is being overlooked. Instead, bond investors are rapidly repricing how interest rates might look in the near term. Traders have pushed back the timing for the next rate cut from the Federal Reserve to September from earlier expectation of June or July. Governments in Asia are also scrambling to

Oil prices soared more than 20% to their highest since July 2022 as the week-long war led some major oil producers in the region to cut supplies and concerns of prolonged disruption to shipping through the Strait of Hormuz rattled investors. “The spike in oil price is a clear function of uncertainty as to the duration of the conflict,“ said George Boubouras, head of research at K2