I am probably not far wrong in saying that oil is the real asset whose price movements ripple most directly across the entire global economy. A surge in prices is bad news for almost everyone, except energy companies and producing countries. And even then. This time it is hard to argue that the Gulf states are benefiting, as their risk premium has surged due to the destabilisation of the region. The instability is already producing very tangible consequences. Dubai, the offshore base of choice for tax expatriation, is experiencing a kind of exodus. I read that major investors have begun reassessing the financing of data centres in the region. Even Formula 1 is being drawn into the geopolitical vortex.

The first Grand Prix of the season took place this weekend in Melbourne, Australia. Fans were able to celebrate George Russell's (Mercedes) victory. Yet geopolitics always catches up with you. The 2026 season could quickly face a prolonged pause. Formula 1 is due to travel to Bahrain and Saudi Arabia in April, and uncertainty is growing over whether those races will take place. For a more detailed explanation of the issue, I would refer you to an article by my colleague Eloi, who covers the weekend shift.

If my opening may seem somewhat anecdotal compared with the stakes involved, it also illustrates that the consequences of the current conflict extend well beyond the energy question. The conflict in the Middle East has now entered its tenth day, and for now no resolution is in sight. Yesterday Iran announced the appointment of Mojtaba Khamenei as Supreme Leader, a way of signalling the continuity of the regime. Over the weekend the fighting continued, and even widened as new infrastructure became targets. Israel struck fuel depots near Tehran, while an Iranian drone targeted a desalination plant in Bahrain.

These facilities are among the most critical assets for Gulf countries, arguably even more than hydrocarbons, because they depend on them for their supply of drinking water. Further attacks of this type by Iran could therefore trigger a response. So far the Gulf states have appeared extremely cautious. They defend their territory but refrain from retaliation, fearing an escalation of the conflict. Yet one wonders how long such a posture can last. To put it more bluntly, can they continue to absorb drones and missiles every day without striking back?

Ultimately, the question of duration is central for everyone. How long can the Iranian military withstand American and Israeli bombardment? And how long will the United States be able to ensure the air defence of its allies in the region? It is also the key question for investors. Historically, conflicts tend to create buying opportunities, provided they remain short.

Ten days of fighting have already triggered a surge in energy prices. Late last week oil crossed the 90 dollar threshold as several countries began halting production. The blockade of the Strait of Hormuz is preventing exports, eventually saturating storage capacity. This morning the price surge continues and the 100 dollar mark has been smashed. Brent reached 119 dollars before easing back. According to the Financial Times, G7 finance ministers will discuss on Monday a coordinated release of emergency oil reserves organised by the International Energy Agency.

The surge in oil prices is pushing Asian stock markets sharply lower this morning. European markets are also expected to open significantly down. Last week Wall Street limited the damage, with the S&P 500 falling about 2%. Europe, more exposed to the energy shock, had already been hit harder, with declines of around 6 to 7% across the main indices.

And as if a war in the Middle East and its consequences were not enough, US macroeconomic data are sending rather worrying signals. On Friday the employment report showed 92,000 jobs lost in February, while the consensus had expected 55,000 jobs to be created. Technical factors, including weather and strikes, explain part of the negative surprise. Nevertheless, the figures still fit within a broader trend of a slowing labour market. They also place the Federal Reserve in the worst possible position: facing both rising unemployment and rising inflation.

The Fed meets next week and, barring a major surprise, is expected to keep rates unchanged. Before that meeting, investors will look on Wednesday at the February CPI data. If inflation shows a moderate increase, as expected, investors may well ignore the report on the grounds that it covers a period before the outbreak of the Middle East conflict. However, if the figure comes in stronger than expected, it would reinforce fears of a renewed inflationary cycle.

On Friday, January's PCE inflation and the second estimate of fourth quarter GDP will be released. On the corporate front, investors will be watching results this week from UBS, Inditex, Rheinmetall and Deutsche Bank in Europe. In the United States, Oracle and Adobe are expected to report. A few weeks ago I would never have imagined saying this, but it was not so bad when we spent our days talking about AI.

In the rest of the news:

  • Fitch announced on Friday that it is maintaining France's A+ rating.
  • The United States moved to daylight saving time yesterday. For the next three weeks there will therefore be one hour less time difference.
  • US special envoy Steve Witkoff and Donald Trump's son-in-law Jared Kushner will travel to Israel on Tuesday, according to Axios, citing a senior US official.
  • In China, consumer prices picked up in February.
  • Germany's Greens outperformed Chancellor Merz's conservatives in a regional election.

Asian equities are taking the brunt of the shock from the Iran conflict and the surge in oil prices: Japan is down 5.20%, Mainland China fell 1%, the Hang Seng lost 1.8%, South Korea declined 6%, India dropped 2.4%, Taiwan lost 4.4% and Australia is down 2.8%.

Today's economic highlights:

On today's agenda: the current account in Japan; the monthly and annual inflation rates along with the annual PPI in China; the monthly factory orders and industrial production in Germany; consumer confidence in Switzerland. See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$5,100
  • Crude Oil (BRENT): US$109.37
  • United States 10 years: 4.19%
  • BITCOIN: US$67,176.7

In corporate news:

  • AstraZeneca had its price target raised by AlphaValue/Baader Europe due to its strong pipeline and incorporation of 2025 financial results, though growth estimates for 2028 were slightly reduced.
  • Emmerson Resources announced it will be acquired by Pan African Resources for A$311 million under a scheme of arrangement at A$0.45 per share.
  • M&C Saatchi CEO Zaid Al-Qassab steps down, Sky News reports.
  • Henderson Far East Income reported an unaudited net asset value of 2.478 pounds sterling per share, including current financial year revenue items, as of March 5.
  • Bankers Investment Trust reported an unaudited net asset value of 1.434 pounds sterling per share, including current financial year revenue items, as of March 5.
  • Templeton Emerging Markets Investment Trust reported an unaudited net asset value of 2.8914 pounds sterling per share, including income, as of March 5.
  • F&C Investment Trust reported net assets per ordinary share before charges and including income at 13.6392 pounds sterling as of March 5.
  • Lonza sells its capsule and health ingredients division to Lone Star for CHF 2.3 billion.
  • BP Plc is seeking at least $3.7 billion from Venture Global following LNG arbitration.
  • Roche's Phase III Persevera study in breast cancer failed to meet its primary endpoint.
  • Denmark's Vestas to build wind turbines in Japan, according to Nikkei.
  • Infineon and Subaru collaborate on advanced driver assistance systems.
  • ABB invests $75 million in India.
  • Vertiv, Lumentum, Coherent, and EchoStar will join the S&P 500 index on March 23, replacing Match Group, Molina, Lamb Weston, and Paycom.
  • Boeing is close to securing an order for 500 aircraft during the Trump-Xi summit, according to Bloomberg.
  • Oracle and OpenAI have reportedly abandoned their plans to expand their data center in Texas, according to Bloomberg, but Reuters has sources saying otherwise.
  • Novo Nordisk and Hims & Hers are ending their dispute and partnering to sell obesity treatments, according to Bloomberg.
  • Live Nation is close to a deal in the US without selling Ticketmaster, according to Bloomberg.
  • KKR is considering selling its data center cooling subsidiary for several billion dollars, the FT reveals.
  • Amazon will continue to offer Anthropic's Claude to its non-defense cloud customers.

See more news from UK listed companies here

Analyst Recommendations:

  • Coats Group Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 130 to GBX 135.
  • Imi Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 3100 to GBX 3300.
  • Serco Group Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 330 to GBX 350.
  • Zegona Communications Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 1600 to GBX 2300.
  • Flutter Entertainment Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 21300 to GBX 12900.
  • Wizz Air Holdings Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 11.50 to GBP 12.
  • Jet2 Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 19 to GBP 17.
  • Ithaca Energy Plc: Goldman Sachs maintains its neutral recommendation and raises the target price from GBX 170 to GBX 185.
  • Shell Plc: Goldman Sachs maintains its buy recommendation and raises the target price from EUR 37 to EUR 42.
  • Rio Tinto Plc: JP Morgan downgrades to neutral from overweight and reduces the target price from GBP 78.40 to GBP 72.20.
  • Antofagasta Plc: JP Morgan downgrades to neutral from overweight and reduces the target price from GBP 44 to GBP 32.
  • Glencore Plc: JP Morgan maintains its neutral recommendation and reduces the target price from ZAR 114 to ZAR 101.
  • Reckitt Benckiser Group Plc: JP Morgan maintains its neutral recommendation and reduces the target price from GBP 61 to GBP 58.