Morning Bid: Ticking time bomb

• Brent crude spiked with WTI hitting $100/barrel and U.S. gas prices topping $4/gallon; Japan's Nikkei fell 3.5% (down 12% in March) and South Korea's KOSPI dropped 6%
• Bond markets collapsed globally with 10-year Treasury yields at highest since last data point; Fed futures now price 75% chance of rate hike by year-end instead of cuts, with ECB and BOE also expected to raise rates three times
• Gold fell to its lowest 2026 level after suffering its biggest weekly drop since 1983 (over 10%), failing as both war hedge and inflation buffer as investors flee to cash

Market Summary: Escalating Iran Crisis Triggers Global Selloff

Key Developments

President Trump's 48-hour ultimatum to Iran to reopen the Strait of Hormuz expires Monday, threatening to "obliterate" major Iranian power plants. Iran has countered with threats against energy and water infrastructure across the Gulf. The conflict, now in its fourth week, shows no signs of de-escalation.

Market Impact

Energy: Brent crude and WTI both surged past $100 per barrel Monday morning. U.S. gas prices now average over $4 per gallon.

Equities: Global stocks plummeted to their lowest levels since November 2025. Japan's Nikkei closed down 3.5% (March losses exceed 12%), while South Korea's KOSPI shed nearly 6%, triggering trading curbs. European and U.S. markets opened lower.

Bonds: Traditional safe havens failed as government bonds sold off globally. 10-year U.S. Treasury yields hit multi-year highs, with Fed futures now pricing in zero rate cuts for 2026 and a 75% probability of rate increases by year-end. The ECB and Bank of England are expected to implement three rate hikes each.

Gold: The precious metal fell to 2026 lows after its largest weekly decline (over 10%) since 1983, as investors liquidate positions and flee to cash.

Currency: The Japanese yen weakened toward ¥160 per dollar, prompting intervention warnings from Tokyo despite hawkish comments from BOJ Governor Ueda.

Outlook

The International Energy Agency pledged stockpile releases "if necessary," though IEA chief Fatih Birol emphasized reopening Hormuz remains the only viable solution. Additional upward pressure on energy prices appears inevitable amid escalating Middle East tensions.