WS #366

The dominant signal in this data window is the escalating Iran conflict, with direct impacts on energy markets, geopolitical stability, and inflation. The US has temporarily eased Russian oil sanctions for 30 days to mitigate supply disruptions from the Strait of Hormuz blockade, a move criticized by Ukrainian President Zelenskyy as potentially providing Russia with $10 billion for its war effort. This development, reported by multiple sources including AP and Bloomberg, indicates heightened volatility in oil markets, with Brent crude hovering around $100 per barrel, a threshold that could strain the global economy if sustained. Concurrently, NATO intercepted a third Iranian missile over Turkey, and Iran launched attacks on Gulf states, underscoring the risk of regional spillover and further supply shocks. Economic indicators show persistent inflationary pressures even before the conflict, with the US PCE core inflation rising to 3.1% in January, the highest in nearly two years. The Iran war is expected to exacerbate this, with gas prices already jumping to $3.60 per gallon in the US, potentially leading to higher inflation in March and April. This could influence Federal Reserve policy, with the next meeting likely to maintain elevated rates amid the uncertainty. In Europe, the euro fell to a seven-month low against the dollar due to energy price concerns, reflecting broader market anxiety. Corporate developments include analyst actions with mixed signals: Stifel maintained a Buy on Adobe but lowered its price target to $400, while RBC Capital raised its price target for Venture Global to $14, indicating bullish sentiment in energy. Additionally, Apple announced a reduction in App Store commission rates in China from 30% to 25% for standard transactions, effective March 15, 2026, which could impact its services revenue and competitive positioning in the region. Geopolitical tensions are also affecting trade, as India and the US remain engaged in bilateral trade agreement talks despite media reports of a hold-off.