Oil and fuel prices are expected to surge again today as US and Israeli strikes on Iran extend into a second week, and as Iran ramps up strikes on oil facilities around the Gulf, with the Strait of Hormuz still closed.
And then in our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga looks at what an extended war might mean, especially if global asset prices slump and US fuel prices soar ahead of US midterm elections in November.
5 things to know in 5 minutes:
All eyes are on the conflict in and around Iran this morning, with the length and extent of the conflict the main focus. ANZ Group Chief Economist Richard Yetsenga says the oil price is the main transmission channel into the global economy and the duration of the conflict is the main factor for oil.
US jobs fell 92,000 in February, making it the fifth month in the last nine months where jobs have contracted. ANZ’s Head of G3 Economics Brian Martin says the Fed is currently hamstrung by the inflationary effects of higher oil prices.
Brian says the Fed is unlikely to cut in March, but a cut later in the year is still on the agenda because the jobs market is so weak.
However, the US dollar has been one winner from all the turmoil, says ANZ’s Head of FX Research Mahjabeen Zaman.
Data due out later today is expected to show China’s headline Consumer Price Inflation (CPI) in February was 1% from a year ago, up from 0.2% in January, says ANZ Greater China Economist Vicky Xiao Zhou.
Cheers
Bernard.
PS: Catch you tomorrow with analysis from that data on both inflation and deflation in China later today.
