ORLANDO, Florida, March 12 (Reuters) – Global stocks fell on Thursday, slammed by a 10% spike in oil prices, spiking bond yields and a stronger dollar, all of which point to a deteriorating outlook for consumers, businesses and economic growth.
In my column today I argue that, although the “Trump always chickens out” strategy of buying beaten-down stocks on the assumption that the U.S. president backs down from his more extreme policies, the Middle East war may be a “TACO” too far.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Today’s Key Market Moves
Today’s Talking Points
* 2026 Fed rate cut bets evaporate
And just like that, it was gone. Not so long ago – i.e., only a few weeks ago, before the U.S.-Israeli attacks on Iran – many analysts were predicting three interest rate cuts from the Fed this year. As of Thursday, not even one U.S. rate cut in 2026 is fully priced in at all.
Traders have made it clear where they think the stagflation risks lie with oil at $100 a barrel, and the ‘transitory’ lessons of 2021-22 are weighing heavily too. No rate hikes are priced in yet though, and next week would be far too soon. Right? Let’s see what tomorrow’s PCE inflation figures hold.
* Global bond rout
Zoom right out the curve, and geographically, and inflation fears really are intensifying, as the accelerating global bond market selloff shows. Investors are fleeing fixed income everywhere.
On Thursday, the two-year U.S. yield hit its highest since August, and the 2s/10s curve flattened the most since April; Germany’s 10-year yield is near 3% and the highest since October 2023, and UK yields are up 60 bps in two weeks.
* Central bank bonanza
Central bankers are in an unenviable position, and could be forgiven for just wanting to close their eyes, sit on their hands and wish the unfolding crisis away. But many of them are under the spotlight next week in what will be one of the busiest weeks of central bank meetings in a long time.
Here’s a rundown of who’s meeting next week: the central banks of Australia, Canada, Brazil, Japan, Sweden, Switzerland, the euro zone, the UK and, of course, the Fed. The most likely to hike rates is the RBA, then possibly the BOJ, with the rest on hold. But if oil’s at, say, $120 or higher, you never know.
What could move markets tomorrow?
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(Reporting by Jamie McGeever;)
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