WS #361

The dominant signal from this data window is the escalating Iran-US-Israel conflict, with significant market-moving developments. NATO intercepted a third Iranian ballistic missile over Turkey, marking repeated incursions into allied airspace and heightening regional tensions. Concurrently, a US KC-135 refueling aircraft crashed in Iraq during operations against Iran, with four crew members confirmed dead, underscoring the operational risks and potential for further escalation. These events, corroborated by multiple sources including GDELT, Reuters, and AFP, reinforce stagflation concerns as oil prices have surged above $100 per barrel, with Nuvama warning that sustained closure of the Strait of Hormuz could push crude to $150 per barrel within 4-8 weeks, directly impacting energy and broader markets. Geopolitical and economic cross-currents are evident. Saudi Arabia reportedly cut oil output by at least 2 million BPD to around 8 million BPD, tightening supply further amid the conflict. The Trump administration's temporary easing of sanctions on Russian oil to curb price spikes has funneled billions to Russia, complicating global energy dynamics and drawing sharp rebukes from European leaders. These factors, combined with the ongoing Strait of Hormuz blockade disrupting shipping and causing flight prices to soar by up to 225% due to Kerosin shortages, create a volatile backdrop for commodities and travel sectors. Corporate and economic developments show mixed signals. JPMorgan reiterated Overweight on Apple with a $325 price target, a bullish signal for tech. However, India's forex reserves fell by $11.68 billion, the biggest drop in over a year, as the RBI intervened to support the rupee amid oil price pressures, highlighting emerging market vulnerabilities. The U.S. GDP growth for Q4 2025 was revised down sharply to 0.7% from 1.4%, indicating weaker economic momentum pre-conflict, while OECD headline inflation slowed to 3.3% in January but remains 35.6% above pre-COVID levels, underscoring persistent price pressures.