Global Markets This Week: Tariffs and Middle East Conflict Drive Safe-Haven Demand

• Brent crude oil jumped over 10% to above $90 as the Strait of Hormuz closure created supply shock concerns, with the US temporarily easing Russian oil shipment restrictions to India to stabilize markets
• The US dollar gained 1.24% for the week, outperforming traditional safe havens as investors prioritized liquidity, while USD/CHF and USD/JPY reflected shifting safe-haven dynamics away from the franc and yen
• US tariff rates surged from 2.4% before Trump's administration to over 16% by end of 2025, with Chinese goods facing 145% tariffs, creating hiring slowdowns and pushing job openings to lowest levels since September 2020

Market Summary: Geopolitical Tensions and Trade Uncertainty Drive Volatility

Key Market Drivers

Global markets experienced extreme volatility in early March 2026 as Middle East conflict and escalating tariffs triggered significant safe-haven flows. U.S.-Israeli strikes on Iran and the closure of the Strait of Hormuz—a critical energy corridor—left nearly 200 oil tankers stranded, severely disrupting global supply chains.

Major Price Movements

• Brent crude oil: Surged above $90/barrel (+10.37%), with potential to reach $150 amid supply disruptions
• Gold: Rose 1.68%, consolidating above $5,000 with bullish outlook toward $6,000
• U.S. Dollar Index: Gained 1.24%, though remains range-bound between 96.50-100.50
• USD/CHF: Rebounded from 0.76 support level
• USD/JPY: Formed double bottom at 152; key resistance at 159

Trade and Economic Impact

U.S. tariff rates exploded from 2.4% pre-Trump to over 16% by end-2025, with Chinese goods facing 145% duties. Despite Supreme Court invalidations, tariff burdens remain elevated. The Tax Foundation estimates continued high trade barriers through 2026.

Labor market consequences emerged as businesses delayed hiring amid policy uncertainty, with job openings declining to 6.542 million (December 2025)—lowest since September 2020. Import-dependent goods like coffee and tomatoes saw sharp price increases.

Market Outlook

Liquidity became the primary driver of capital flows, favoring the U.S. dollar over traditional safe-havens like the Swiss franc and Japanese yen. Energy-dependent economies including Taiwan and South Korea scrambled for alternative supply arrangements. The U.S. temporarily eased restrictions on Russian oil to India, while China curtailed refined fuel exports, further tightening global supply.

Analysts expect continued volatility as geopolitical tensions persist and inflation risks mount from rising energy costs.