Morning Bid: Hormuz haze hits markets

Market Overview - The ongoing Middle East conflict is causing significant volatility in global markets, with energy prices at the forefront of financial impacts [1] - Brent crude oil reached a 14-month high at $82.37 per barrel, increasing by $10 since Friday's close, while U.S. crude hit an 8-month high at $75.55 per barrel [1] - Wall Street stocks initially rebounded, led by the tech sector, but futures are down nearly 2% as global stock markets, including Japan's Nikkei and the eurozone Stoxx index, experienced sharp declines of about 3% [1] Economic Indicators - U.S. Treasury yields are rising, with the 10-year yield up 13 basis points from Friday's close, indicating market expectations of no further Federal Reserve rate cuts until September [1] - A report indicated a sharp increase in U.S. manufacturers' input prices in February, the highest since 2022, prior to the recent oil price surge [1] - The eurozone's flash inflation reading exceeded forecasts, contributing to concerns about economic stability in the region [1] Currency and Commodity Impact - The dollar is benefiting from relative energy impact calculations, with the euro dropping to its lowest point in six weeks due to rising natural gas prices in Europe, which increased by approximately 30% year-on-year [1] - Natural gas prices in Europe reached their highest levels in three years, exacerbated by the Middle East conflict and attacks on Qatar's energy infrastructure [1] Central Bank Responses - The Bank of Japan has warned of potential intervention to address yen weakness, while the Swiss National Bank is more willing to intervene to counter the rise of the safe-haven franc [1] - The spread of stablecoins in the eurozone could weaken the effectiveness of monetary policy and impact bank lending, as highlighted in a recent European Central Bank study [2]