GGMA Morning Brief: Stocks rise on Trump’s Iran comments / Japan Q4 GDP revised upwards, wages rise / RBA warns on inflation risks / AU cons. confidence / China’s exports surge / Today: US NFIB & ADP
Good morning,
I hope all is well.
Here are the main overnight news and market movers:
Stocks rise after Trump signals quick resolution to Iran conflict
Asian equities staged a broad relief rally on Tuesday after President Trump signalled the Iran conflict could be resolved ‘very soon,’ triggering a sharp reversal in crude oil prices. The MSCI Asia Pacific Index climbed 2.4%, with KOSPI surging 4.65% and the Nikkei 225 gaining 2.83%, though S&P 500 futures slipped 0.23% as the US recovery lost momentum. Brent crude tumbled as much as 10% while WTI dropped 6.73% to $88.39, as G7 energy ministers prepared to discuss a coordinated release of strategic petroleum reserves. The dollar index has only changed slightly, while Bitcoin rose. US Treasury 10-year yields edged up 1 basis point to 4.11%, Japan’s 10-year yield is down 1 bp after the GDP release and gold advanced 0.64% to $5,171.57 per ounce.
Market Snapshot
Source: Tradingview.com
Trump hints at ending war, considers lifting oil sanctions
President Donald Trump stated he would waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz, predicting that the war with Iran would be resolved “very soon”. The US president mentioned he could waive “certain oil-related sanctions to reduce prices”, and that the US military objectives were “pretty well complete”, but acknowledged that unanswered questions remained about Tehran’s leadership. (BBG)
Yesterday, Russian President Vladimir Putin and his US counterpart Donald Trump discussed Iran in their first phone talk this year. The talks, which lasted about an hour, were constructive and business-like and “will undoubtedly have practical significance for the further work of the two countries in various areas of international politics,” Tass news agency reported, citing Kremlin foreign policy aide Yuri Ushakov. (BBG)
The Pentagon used up $5.6 billion worth of munitions in the first two days of its military strike on Iran, according to three U.S. officials. This highlights the growing concern among some on Capitol Hill about how quickly U.S. forces are depleting the limited supply of America’s most advanced weaponry. (WaPo)
Bloomberg reports that several Senate Democrats are threatening to force numerous war powers votes and disrupt the chamber unless Republicans agree to hold public hearings with key Trump administration officials on the reasons for the attacks on Iran.
Iran’s leadership is signalling resilience despite protests, economic strain, and external pressure from the U.S. and Israel, projecting that the regime remains cohesive, in control, and fully capable of defending itself and retaliating against its adversaries, according to the WSJ.
Japan Q4 GDP revised upwards
Japan’s economy grew at an annualised rate of 1.3% in Q4 2025, significantly higher than the initial estimate of a 0.2% expansion and slightly above market forecasts of 1.2%. The revised figure marked a rebound from a 2.6% contraction in Q3, driven mainly by stronger domestic demand. (TE)
Japan real wages rise for the first time in 13 months, boosting BoJ rate hike case
Japan's inflation-adjusted real wages rose 1.4% year-on-year in January — the first increase in 13 months and above the 0.9% consensus. Nominal cash earnings accelerated to 3.0% year-on-year from 2.4%, with base salary growth of 3.0% marking the largest rise since October 1992. Overtime pay jumped 3.3% to a three-year high, while consumer inflation slowed to 1.7% — the lowest since March 2022 — thanks to fuel subsidies that flattered the real wage reading. The data strengthens the Bank of Japan's case for further rate hikes at its March 18-19 meeting, where officials will also assess the results of spring wage negotiations, with Rengo seeking an average increase of 5.94%. (RTRS)
Middle East war set to push inflation higher than forecast, warns RBA deputy governor
The Reserve Bank’s Deputy Governor, Andrew Hauser, states that inflation in Australia appears likely to be higher than previously forecast before the outbreak of the Middle East conflict. Hauser admits that the bank’s June headline inflation projection – an annual rate of 4.2% – is probably going to be surpassed due to rising oil prices and other consequences of the Middle East war. Inflation is already well above the bank’s 2-3% target range. Hauser avoids giving a specific mid-year estimate but downplays the likelihood that it will reach 5% by then, contrary to what NAB’s chief economist, Sally Auld, has suggested.
Hauser says: “That 5% I think assumes that the oil price is in the sort of US$100 range, which we were well into yesterday, but not into today. We don’t have updated numbers on our forecast now. We don’t actually formally update our forecast until May, which is the [board] meeting after the one coming up. […] But it clearly is the case that it’s an upside risk to that projection in February. It’s still in flux […] I don’t want to give a number that might give a false sense of accuracy. But certainly directionally it’s higher than the projection we published in February.”
The Reserve Bank’s board will meet to discuss interest rates next week. Reserve Bank Governor Michele Bullock has flagged that the meeting will be “live” – meaning there could be a change in interest rates announced on Tuesday. (TC)
Westpac consumer confidence edges higher in March, but unemployment expectations rise
The Westpac–Melbourne Institute Consumer Sentiment Index edged up 1.2% to 91.6 in March, but an initially positive tone faded as the survey week progressed. Consumers showed slightly less pessimism about their current finances and attitudes toward major purchases. Yet, growing unease emerged about the near-term economic outlook, even as concerns about the medium term eased somewhat. Unemployment expectations rose above average, particularly among respondents aged over 45. Meanwhile, the data revealed a notable tension between increasingly bullish views on house prices and persistently weak sentiment among potential homebuyers. (Westpac)
Australia NAB business confidence turns negative for the first time in 11 months
Australian business confidence turned negative for the first time in 11 months, with NAB’s February survey showing a 4-point drop to -1, likely reflecting caution after the RBA’s surprise rate hike earlier that month. Business conditions, however, held steady at +7 — in line with the long-run average — with forward orders rising 4 points to their highest level since late 2022 and capital expenditure plans hitting a three-year high. Capacity utilisation was flat at 82.8%, some 1.5 percentage points above its long-run average, with six of eight industries running above trend. On the inflation front, the report flagged a worrying spike in quarterly retail price growth to 1.0% from the prior month’s 0.5%. In comparison, labour costs rose to 1.5% — a signal that underlying price pressures remain sticky despite the broader demand caution. The divergence between soft sentiment and firm forward-looking indicators suggests businesses are wary of the macro outlook but not yet pulling back on investment. (NAB)
China’s exports surge in the first two months of the year
China’s exports grew more than expected in the first two months of the year, highlighting their role as a crucial growth driver for the world’s second-largest economy. Outbound shipments soared 21.8% year-on-year from January to February, a significant rise from the 6.6% increase seen in December, the General Administration of Customs announced on Tuesday. (Continue Reading – WSJ)
France’s municipal elections will be telling for Europe
Next week’s French municipal elections may be local in scope, but their implications are undeniably national — and European. When French voters go to the polls to elect roughly 35,000 mayors across villages, towns, and major cities, they will provide the clearest indication yet of the country’s political climate ahead of next year’s presidential election, which could both fundamentally reshape France and destabilise the EU. (Continue Reading – Politico)
UK BRC retail sales disappointed in February
UK retail sales disappointed in February, with the BRC reporting like-for-like growth of just 0.7% year-on-year — well below the 2.0% consensus and a sharp slowdown from January’s 2.3%. Wet weather was the primary culprit, dampening spending across most categories both online and in-store. Non-food sales fell 0.4% year-on-year, while online non-food sales dropped 1.3% against growth of 1.9% a year earlier. Valentine’s Day provided a bright spot, lifting jewellery, watches, and perfume sales, but it was not enough to offset the broader weakness. BRC CEO Helen Dickinson said ‘February’s grey, wet weather hit retail sales hard,’ while KPMG’s Linda Ellett noted that excluding food and drink, ‘momentum wasn’t strong.’ Consumer confidence barely improved to -30 from -31, remaining deeply pessimistic. The data adds to signs of a fragile UK consumer backdrop heading into spring. (BRC, TI)
UK consumer confidence has plunged sharply since the conflict in the Middle East began, according to a new survey, as the global repercussions of the war start to impact economies like Britain’s. An index measuring confidence in the UK dropped to a four-month low in March, erasing gains made at the start of the year, Barclays said on Tuesday. (BBG)
Today’s Macro Roadmap: US NFIB, ADP & existing home sales
On the policy maker front, the Fed enters its pre-FOMC blackout period ahead of the March 18-19 meeting.
Good luck today, and feel free to ping me in the chat to discuss markets and views!
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