The week ending 20 March was particularly packed with meetings of central banks, most of which signalled or at least hinted at upcoming hikes to tackle expected rising inflation. Some major currencies, like the euro, made gains while the dollar and gold declined as participants priced in hawkishness. This article summarises the reaction to the central banks’ statements then looks briefly at the charts of XAUUSD and GBPUSD.The Reserve Bank of Australia (RBA), Bank of Canada (BoC), Federal Reserve (Fed), Bank ...

Core Viewpoint - The ongoing U.S.-Israeli war with Iran has led to a significant increase in oil prices, causing global bond markets to decline as investors react to inflation concerns and potential central bank responses [1][2]. Group 1: Oil Market Impact - Oil prices surged by as much as 28% to nearly $120 per barrel, the highest level since July 2022, due to supply cuts from major oil producers and fears of shipping disruptions through the Strait of Hormuz [2]. - Brent crude oil was reported to be up 16% at around $107 per barrel [2]. Group 2: Bond Market Reaction - Government bond yields increased sharply as prices fell, with investors now anticipating two rate hikes from the European Central Bank by year-end, a significant shift from previous expectations of a rate cut [5]. - The UK experienced the most significant selling pressure, with two-year yields rising nearly 40 basis points, marking the largest daily increase since the economic plan of former Prime Minister Liz Truss [6]. - In Germany, yields rose by 11 basis points, reaching the highest level since July 2024, following a previous increase of around 30 basis points [6]. Group 3: Central Bank Expectations - Investors are now pricing in a potential rate hike from the Bank of England, which was previously seen as likely to cut rates in March [5]. - Expectations for Federal Reserve rate cuts have been delayed as inflation concerns take precedence [5].