Even so, it works. Yesterday, a few vessels made it through the Strait of Hormuz without incident. That was enough to set the market twitching. In reality, Iran still appears to be in a position to decide who gets through unscathed and who risks coming away bruised. Yesterday, for instance, those included ships carrying crude bound for Pakistan or China. You could call it selective distribution: it is hard to imagine cargoes of anything at all sailing serenely towards the United States or Europe. The spot price of Brent crude remains above USD 100 a barrel.

That did not stop equity indices from finding their feet again on Monday after a difficult week. Every sector staged something of a rebound, technology more than most: the large platforms and their fat margins are not on the front line when energy prices spiral, even when they are drawing astronomical amounts of power from the grid because of their ever more power-hungry servers. Put another way, digesting a spike in electricity prices is easier to cope with when you have Alphabet's 35% operating margin than Nucor's 11% margin in steelmaking. The real strain will begin to show if the barrel has decided to dig in at three-digit levels. Europe preceded the US rebound with a rather limp recovery, cobbled together in piecemeal fashion: better performances from property and energy, somewhat counter-intuitively, and from banking, amid the commotion around Commerzbank, which Unicredit is courting with all the subtlety of a cavalry charge. But there was nothing especially structured about it, that much has to be said.

For now, the most fashionable back-of-the-envelope assumption is that things will eventually calm down with Iran and that black gold will start flowing normally again. How will they calm down? Nobody really knows, but it could come via the fall of the regime, economic strangulation, a shortage of ammunition, a surrender, the securing of the Strait of Hormuz or a peace deal whose outlines are still hard to make out. In any case, the much-vaunted coalition Donald Trump had called for to secure the strait has been a spectacular flop. Asian countries have looked the other way, while European countries have sent back a firm refusal. "Sort it out yourself", to put it crudely. Donald Trump nevertheless thought he had detected an opening from Emmanuel Macron, the only leader with a flotilla worth the name nearby. But nothing concrete has emerged at this stage.

You do not need a crystal ball to point out that the narrative around oil price swings and their impact on headline inflation remains the defining driver of this month of March. But when the story becomes too oppressive, the market likes to see the cavalry arrive. That is more or less what happened yesterday evening, with the infectious optimism radiating from Nvidia. The group is currently holding its annual developer conference. For the technology ecosystem, it is an opportunity to put out a joint statement with the megastar and enjoy a little reflected glory. Anything goes, from convoluted technological compatibility to Jensen Huang-themed beer mats, via every sort of incredible partnership accompanied by statements from executives seemingly possessed by the demon of AI. From a stockmarket perspective, it works rather well. It gives the sector a lift, even if it is a bit like Red Bull: euphoric in the moment, but it does not last. Unless, of course, you crack open another one. This morning, the main beneficiaries are South Korea and Taiwan, via giants such as Samsung Electronics and TSMC, both closely tied to Nvidia's rise.

On the macro front, there is plenty of chatter around the postponement of the meeting between Donald Trump and Xi Jinping, initially scheduled for the end of the month. The White House officially asked Beijing to delay the summit planned in China by a month because of the war in Iran. Several interpretations are doing the rounds. The most cynical is that it signals the conflict in the Middle East is here to stay. In Australia, the central bank opted for a rate hike, as expected. But the vote was extremely close, which was more of a surprise. RBA members are still grappling with inflation that is too high, but they also fear the Australian economy could suffer from the consequences of the conflict in Iran. It is a dilemma that neatly illustrates what the many central banks meeting this week are going to be up against.

Across Asia-Pacific, outside the markets benefiting from Nvidia's pull, trading is relatively cautious. The Nikkei 225 is down 0.1%, while India and Hong Kong are posting modest gains. Australia is a little more upbeat, up 0.4%. Western leading indicators, by contrast, are firmly in the red, both in the United States and in Europe, where yesterday's gains are likely to be surrendered at the open. An Iranian drone strike on a gas facility in the United Arab Emirates was enough to send tensions higher again this morning. Volatility remains elevated, even if the VIX has eased somewhat from the weekend.

Today's economic highlights:

Today's agenda includes: the RBA interest rate decision followed by the press conference in Australia; the ZEW Economic Sentiment Index in Germany and the Euro Area; in China, the FDI (YTD) YoY; in the United States, preliminary building permits, housing starts, pending home sales, and the API crude oil stock change. See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$5,011.08
  • Crude Oil (BRENT): US$103.9
  • United States 10 years: 4.25%
  • BITCOIN: US$74,289.2

In corporate news:

  • Abu Dhabi Islamic Bank shares dropped 4.7% in early trade according to LSEG.
  • Close Brothers strongly disagreed with a report by Viceroy Research regarding its motor finance provisions and is set to report half-year results today.
  • International Consolidated Airlines Group's British Airways extended its temporary reduction of Middle East flights due to regional instability.
  • BHP and Rio Tinto announced the completion of a federal land exchange for their Resolution Copper joint venture in Arizona.
  • BP plc confirmed the start of gas production from the Quiluma field in Angola, part of the New Gas Consortium.
  • AstraZeneca received EU approval for its Imfinzi drug as a treatment for early-stage gastric and gastroesophageal cancers.
  • Germany wants Commerzbank to remain independent, Chancellor Merz said following UniCredit's takeover bid.
  • Kone is in talks to acquire TK Elevator for up to 25 billion euros.
  • Alcon abandons its bid to acquire Lensar due to opposition and regulatory delays in the United States.
  • Mercedes-Benz denies rumors of discussions with Geely regarding platform sharing.
  • ENI makes a major gas discovery off the coast of Libya.
  • AB Volvo will stop selling its EX30 and EX30 Cross Country models in the U.S. by the end of the year, according to Business Insider.
  • Nvidia is pulling out all the stops at its developer conference, with a focus on robotics. The company estimates that it will generate at least $1 trillion in revenue from AI chips by the end of 2027.

See more news from UK listed companies here

Analyst Recommendations:

  • Metlen Energy & Metals Plc: Berenberg maintains its buy recommendation and reduces the target price from EUR 63 to EUR 59.
  • Standard Life Plc: Mediobanca maintains its outperform rating and raises the target price from GBX 840 to GBX 894.
  • Burberry Group Plc: BNP Paribas maintains its outperform recommendation and reduces the target price from GBX 1570 to GBX 1450.
  • Shell Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 40 to GBP 45.
  • Tesco Plc: RBC Capital maintains its sector perform recommendation and raises the target price from GBX 440 to GBX 465.
  • J Sainsbury Plc: RBC Capital maintains its outperform rating and raises the target price from GBX 375 to GBX 385.
  • Imi Plc: RBC Capital maintains its sector perform recommendation and raises the target price from GBX 2500 to GBX 2700.
  • Unite Group Plc: Barclays downgrades to market weight from overweight and reduces the target price from GBP 6.15 to GBP 5.20.
  • Auto Trader Group Plc: JP Morgan maintains its underweight recommendation and reduces the target price from GBP 6.30 to GBP 5.15.
  • Hsbc Holdings Plc: JP Morgan maintains its neutral recommendation and raises the target price from GBP 11.90 to GBP 13.60.
  • Shell Plc: Gerdes Energy Research LLC downgrades to neutral from buy with a target price of USD 99.
  • Hammerson Plc: Goldman Sachs maintains its neutral recommendation and reduces the target price from GBX 361 to GBX 327.
  • Drax Group Plc: Goldman Sachs maintains its neutral recommendation and reduces the target price from GBX 947 to GBX 940.
  • Standard Life Plc: Goldman Sachs maintains its neutral recommendation and raises the target price from GBX 761 to GBX 764.