Morning Bid: Reality check

• Oil prices remain elevated with Brent at ~$105/barrel and WTI at ~$93/barrel as the Strait of Hormuz remains affected and Iran denies ceasefire negotiations
• Asian equities sold off significantly: Nikkei down 0.7%, Hang Seng fell 1.7%, and South Korea's KOSPI dropped 2.7%
• U.S. import price inflation accelerated to 1.3% annually in February (pre-oil shock), driven by food, energy, and capital goods, with core import inflation reaching 3.0%

Market Summary: Middle East Tensions Drive Energy Volatility, Market Uncertainty

Key Developments:

Oil prices remain elevated amid stalled Middle East ceasefire negotiations. Brent crude hovers around $105/barrel while WTI trades near $93/barrel. The U.S. claims progress on a 15-point ceasefire plan, but Iran denies negotiations are underway. The Strait of Hormuz remains a flashpoint, prompting energy analysts to raise full-year crude price forecasts.

Market Performance:

Global equities weakened as ceasefire hopes faded. Asian markets declined sharply: Japan's Nikkei fell 0.7%, Hong Kong's Hang Seng dropped 1.7%, and South Korea's KOSPI tumbled 2.7%. Europe's STOXX 600 opened lower. Gold retreated, shedding recent gains tied to conflict resolution hopes.

Treasury Market Concerns:

U.S. Treasury markets showed stress following poor debt auctions and rising long-term inflation risks. February import prices increased 1.3% annually, exceeding forecasts even before the current energy shock. Core import inflation reached 3.0%, driven by food, energy, and—notably—capital goods, which posted their largest increase on record due to AI infrastructure demand.

Corporate News:

• Arm Holdings stock surged after projecting $15 billion in annual revenue within five years from its new data-center chip targeting "agentic" AI applications
• Alphabet and Meta face renewed legal battles over alleged harm to children from social media platform designs
• President Trump scheduled his anticipated China trip for mid-May

Upcoming Data:

Markets await U.S. weekly jobless claims, a 7-year Treasury note auction, and remarks from multiple Federal Reserve officials including Miran, Cook, Barr, and Jefferson.