The price of oil – which has surged 40% since the onset of the war – remained just above $100 per barrel at its highest level since mid-2022

International News via Reuters:

European stocks fell on Friday as investors grappled with uncertainty over the duration of war in Iran, which has disrupted global energy supplies and spurred inflation fears that have upended the outlook for interest rates.

The price of oil – which has surged 40% since the onset of the war – remained just above $100 per barrel at its highest level since mid-2022. Prices moderated somewhat on Friday after the U.S. issued a 30-day license for countries to buy sanctioned Russian oil and petroleum products that were stranded at sea.

Europe’s STOXX 600 fell 0.6% in early trading, putting the index on track for a 6.1% fall in March so far – its biggest two-week decline in a year.

U.S. futures were subdued, with S&P 500 e-minis off 0.1% following steep declines on Thursday that saw the S&P 500 close 1.5% lower.

Meanwhile the U.S. dollar has become the safe-haven of choice during the tumult, putting most other currencies under pressure. The dollar was set for a second consecutive week of gains and is up 2.5% since the war broke out at the end of February.

Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin in Zurich, said there was a sense of urgency in markets around the duration of the conflict.

“If we don’t make any progress and just have a status quo for a prolonged period…that would obviously mean that oil prices stay higher for longer, and we have a more pronounced impact on the economy and on inflation,” he said.

OIL PRICE DRIVING MARKET

Brent crude oil futures were last up 0.8% at $100.30 a barrel, while West Texas Intermediate crude was at $95.98 a barrel. Both had hovered around $60 at the start of 2026.

Traders are trying to predict how long the disruption to oil supplies will last, based on the latest news about the war.

“Headlines are coming at the market like water from a fire hose, which is impacting the price of oil, and consequently, financial markets,” said Mitch Reznick, group head of fixed income at Federated Hermes.

With Iran stepping up attacks across the Middle East as its new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping lane closed, investors are bracing for a prolonged conflict and higher oil prices.

The spectre of rising inflation has led markets to rapidly reprice what they expect from central banks this year, with traders now anticipating just 20 basis points of easing from the Federal Reserve compared to 50 bps of cuts priced in last month.

Two-year Treasury yields, which typically move in step with Fed interest rate expectations, scaled a six-month high on Thursday.

“With the possibility of higher oil prices still elevated, investors should be prepared for continued volatility and potentially further downside in the near term,” said Vasu Menon, managing director of investment strategy at OCBC in Singapore.

SHIFTING RATES OUTLOOK

Jose Torres, senior economist at Interactive Brokers, said the impact of rising oil prices on corporate margins, inflation expectations, rate-cut prospects and yields is sparking volatility, leaving participants with few places to hide.

“Indeed, sinking optimism about Fed rate reductions amid strengthening cost pressures is weighing on traditional safe havens such as silver, gold, and government debt.”

The two-year note yield eased 2 bps to 3.74% after hitting its highest level since August 22 on Thursday. The yield has gained about 35 bps in the two weeks since the war started.

Investor focus will switch to a slate of policy meetings next week with the Fed, the Bank of Japan, the European Central Bank and the Bank of England all due to meet, with most expected to keep rates unchanged. The Reserve Bank of Australia is broadly expected to hike rates next week.

The yen hit its weakest level since July 2024 at 159.69 per U.S. dollar on Friday as Japan warned that it was ready to take action to protect against yen declines. It was last at 159.41. [FRX/]

Analysts said the bar for intervention is higher this time around as any intervention now could prove futile in the face of the relentless dollar buying.

In currencies, the euro fell 0.5% to $1.14575, on course for a weekly decline of nearly 1.4%. The dollar index was at 100.1, set for about a 1% weekly advance.

Gold was 0.2% higher at $5,088.4 per ounce on Friday but set for a 1% drop for the week. [GOL/]

Reporting by Ankur Banerjee in Singapore and Lucy Raitano in LondonEditing by Sam Holmes and Peter Graff

With the Gulf serving as a global crossroads for commercial aviation, the Iran conflict underscores how quickly a problem in a single region can paralyse travel worldwide

International News via Reuters:

In the remote Western Australian town of Dardanup, accountant Natasha Earle and her family are feeling the financial pain of the U.S.-Israeli war with Iran.

Their “once-in-a-lifetime” five-week trip to Europe – booked last May on Emirates and taking them to London, Paris, Berlin, Vienna and Rome – has been upended by the conflict, and is costing roughly A$10,000 ($7,000) more as they reroute to avoid disruptions from drone and missile fire in the Middle East.

“We’ve spent tens of thousands of dollars on this holiday,” said Earle, who is due to fly at the end of this month amid the biggest disruption to global travel since the pandemic. “We should get at least half of that back from Emirates eventually.”

With the Gulf serving as a global crossroads for commercial aviation, the Iran conflict underscores how quickly a problem in a single region can paralyse travel worldwide, driving up prices, squeezing capacity and throwing holiday plans into disarray.

Drone and missile fire have regularly left aircraft circling near Dubai as the war enters its third week, heavily impacting Middle East tourism worth some $367 billion annually to the region.

Combined, Emirates, Qatar Airways and Etihad Airways normally fly more than half of all passengers between Europe and Australia, New Zealand and the nearby Pacific Islands, according to Cirium data.

The war has already led to the closure of much of the Middle East’s airspace due to the risk of missiles and drones, leading to tens of thousands of flight cancellations, reroutings and schedule changes worldwide, disrupting the lives of millions of people.

New Zealander Jacob Brown, 34, who lives in the Qatari capital of Doha, drove through the desert of neighbouring Saudi Arabia to Riyadh where he caught a plane to London after his Qatar Airways flight from Doha to New Zealand – where he was due to be best man at a wedding – was cancelled.

A journey that should have taken him less than 24 hours ended up taking several days due to closed airspace, additional flight chaos, delays and lost baggage.

“It was pretty nerve-wracking flying out of Riyadh just considering that that morning, there had been a few missile interceptions south of the capital,” he said.

Aditya Kushwaha, an Australian disability support worker living in Orange near Sydney, has booked a family holiday to London and Paris from April 13 to 29, with Emirates through Dubai. He is unsure if it will go ahead.

“We are very much in a dilemma of what to do,” Kushwaha said, estimating he might lose more than $10,000 if he cancels the trip and only be able to afford it again in a few years.

DREAM HOLIDAY TURNS TO NIGHTMARE

For Australian Kellee Smith, her “dream holiday” to Europe at the end of March – planned 12 months ago – with her husband and two children has also turned into a “nightmare” and left her roughly A$5,500 out of pocket.

“I’ve had many sleepless nights as I was stressed thinking I’m going to lose my dream holiday … and all the money we paid,” said Smith.

She is waiting for a refund from Emirates of more than A$4,000 after securing back-up flights with Cathay Pacific and Qantas to fly through Asia rather than the Middle East.

The war has narrowed an already-slim flight corridor for long-haul flights between Europe and Asia, complicating operations for global air carriers and sending ticket prices sky-high.

As the conflict rattles businesses worldwide and drives oil prices higher, concerns over jet fuel costs and supplies are also weighing on airlines, with many raising fuel surcharges and some, such as Air New Zealand, cutting flights.

The International Energy Agency has said the war is creating the biggest oil supply disruption in history, while some analysts have warned it could be only a matter of weeks before airlines run out of jet fuel. Vietnam said this week it could face aviation fuel shortages as soon as April due to the conflict.

‘TRAVEL VIRGINS’ STEER CLEAR OF MIDDLE EAST

In the British city of Bath, John Moore, 81, and his wife Pauline – who describe themselves as “travel virgins” – forked out “a couple of hundred pounds” to switch their flights to the Australian city of Brisbane from Qatar Airways to Qantas.

They will transit through Singapore instead of the Middle East.

“We decided we’d rather pay the extra to book via Singapore, which is no guarantee, but clearly it’s likely to be safer than the current route,” Moore told Reuters.

For others, the prospect of travel disruptions due to the war is not worth the risk.

Sumit Sharma, who lives in Sydney and works at Westpac Banking Corp., had planned to travel on Etihad Airways with his family to Dubai, but changed his plans after Etihad confirmed he was eligible for a refund.

“We changed the plan from the Middle East to Hong Kong,” Sharma said, adding that he was now flying with Cathay Pacific and looking forward to taking his son to Disneyland.

Shobana Gopal, a senior consultant with Alliance Insurance in Sydney, has switched her family’s travel plans to China instead of flying through Dubai to get to Austria.

“We’re going to three cities in China,” Gopal said.

Qantas said more passengers were choosing to travel to Europe via the U.S., other Asian cities and Johannesburg in South Africa, using its partner network.

Hong Kong’s Cathay Pacific, said this week the airline was seeing “drastic changes in terms of demand patterns due to the Middle East situation,” while budget carrier Ryanair highlighted a surge in bookings to European destinations as travellers avoided the Middle East.

Lufthansa said demand for routes through Europe had surged, with the German carrier flagging that 12-month forward bookings for direct flights to Asia were up 75% year-on-year.

“The large Middle Eastern airlines like Emirates and Etihad can’t fly the routes they should, and therefore the European and Asian airlines have to pick up that traffic,” aviation specialist Hans Joergen Elnaes said.

Reporting by Christine Chen, James Redmayne and Cordelia Hsu in Sydney; Joanna Plucinska in London, Kimberley Vinnell in New Zealand, Alessandro Parodi in Gdansk, Stine Jacobsen in Frankfurt; Additional reporting by Doyinsola Oladipo; Writing by Anne Marie Roantree; Editing by Kate Mayberry

Germany, France, Italy, Spain, Poland and the Netherlands said in a letter seen by Reuters on Thursday that they backed the idea of centralised supervision to provide impetus to work on the EU’s Savings and Investments Union

International News via Reuters:

The European Union’s six biggest economies have come out in support of centralised capital markets supervision in the EU as Germany dropped its objections, a letter from six finance ministers shows.

Germany, France, Italy, Spain, Poland and the Netherlands said in a letter seen by Reuters on Thursday that they backed the idea of centralised supervision to provide impetus to work on the EU’s Savings and Investments Union, which has been dragging on for more than a decade.

The shift by Berlin is likely to help break the deadlock over creating more integrated capital markets, the lack of which governments say has been holding back EU investment, innovation, better pension systems and a bigger international role of the euro currency.

To help capital flow between the 27 EU countries, the European Commission proposed last December, among other things, to centralise supervision of significant cross-border trading venues, central counterparties, and crypto-asset service providers.

Germany, as well as Luxembourg, Ireland and some other EU countries used to be reluctant to the idea, wary of handing over national oversight of their financial institutions to the European Securities and Markets Authority in Paris.

But the letter by the six finance ministers, dated March 11, showed Berlin has changed its stance.

“We support improving the convergence and efficiency of the supervision of capital markets across the EU, moving toward centralised supervision for the most systemic relevant, cross border financial market infrastructures while avoiding unnecessary duplication or additional costs and ensuring that supervisory responsibility and fiscal accountability go hand in hand,” the six ministers said.

The letter was addressed to the European Commission, the head of euro zone finance ministers and the Cypriot presidency of the EU, which will drive negotiations on the issue.

The six ministers, whose countries jointly account for around 95% of EU capital markets, said they wanted EU governments to reach a joint position on the Commission’s proposals by mid-year. Once all governments have a common position, the Commission proposal can be negotiated with the European Parliament, which could take another six to 12 months.

Apart from supervision, other elements of the Commission’s package proposal from last December included setting up a Pan-European Market Operator Status to allow operators to manage many EU venues without additional local licenses.

It also proposed to harmonize financial services rules across the EU and amended the Central Securities Depository Regulation and European Market Infrastructure Regulation to reduce costly, fragmented and duplicated processes.

The Commission’s package also proposed updates to the EU’s Digital Ledger Technology (DLT) laws to encourage innovation, including simplified authorization for small DLT operators and a streamlining of cross-border operations of investment funds.

Reporting by Jan Strupczewski; Editing by Susan Fenton