Iran War and Central Bank Interest Rate Decisions to Dominate This Week’s Financial Market News
March 16, 2026
(148) But right now, markets have responded positively to stronger-than-projected Chinese data while awaiting today’s release of U.S. industrial production. The Iran War narrative is meanwhile focused on whether President Trump will declare America’s main goals accomplished and pull out or decided to prolong the fight until there is a major downward break in oil prices. Oil price levels were not among the many explanations for starting the war, but their spike has dealt Trump’s political image a major blow. Other governments have given a cool reception to Trump’s suggestion of a collective effort to reopen the Strait of Hormuz, which must happen before the elevated price of oil dissipates, but there’s no guarantee that the U.S. can accomplish that without committing to a much longer military engagement. Weekend bombing of Kharg Island installations, where most of Iran’s oil exports get processed, lifted energy prices further only briefly. The price of WTI is back below the key $100 per barrel level and, at $97, almost 2% lower than its Friday close. Israeli attacks on Hezbollah in Lebanon have escalated further.
U.S. equity futures have opened the week with gains of around 0.5%. European stock markets are mixed, with slight gains in Germany and the U.K. but little net change in the French, Italian or Spanish exchanges. The biggest Asian equity movements this Monday involved rises of 1.1% in South Korea, 1.3% in India and 1.5% in Hong Kong but a 1.6% drop in Indonesia.
Ten-year sovereign debt yields settled back six basis points in Great Britain, five bps in Italy, four bps in Spain and France, and three bps in the United States and Germany. The 10-year JGB yield ticked up a basis point, in contrast amid continuing speculation of possible intervention support for the beleaguered yen, which recovered 0.3% against the dollar overnight.
Dollar losses today have been broadly experienced against other currencies, led by drops of 1.3% versus the kiwi, 1.0% against the Australian dollar, and 0.8% vis-a-vis the South Korean won but also including drops of 0.5% relative to the euro and 0.4% versus sterling and the Swiss franc.
Overnight declines of 2.4% and 1.6% in the prices of silver and gold also conform to the aforementioned financial market moves so far today relative to their trends in recent weeks.
Today’s batch of January-February Chinese data releases revealed solid year-on-year increases in those combined months of 6.3% in industrial production and 2.8% in retail sales and a 1.8% rise in fixed asset investment. In full-2025, production and sales had risen 5.9% and 2.7%, while fixed asset investment (-3.8%)recorded the first calendar year decline in three and a half decades. Separate releases today of Chinese property prices (-0.3% in February and -3.2% on year) and the February 5.3% rate of unemployment (matching it highest level in 12 months) were less encouraging.
Indian wholesale price inflation accelerated in February by 0.3 percentage points to a one-year high of 2.13%. Sub-components also touched a 1-year high among manufactured goods and were at 9- and 2-month highs for food and fuel. India’s jobless rate eased unexpectedly to 4.9% in February from 5.0% in January, while the Indian trade deficit of $27.1 billion last month compared unfavorably with a shortfall of -14.4 billion a year earlier, reflecting the country’s vulnerability to U.S. tariff increases.
New Zealand composite and service sector purchasing manager scores for February of 50.5 and 48.0 represent three months lows.
February producer price inflation in the Czech Republic and Denmark printed at similar negative rates of -2.9% and minus 2.5%, respectively. Bulgarian consumer price inflation slid 0.2 percentage points in February to a 14-month low of 3.3%.
Canadian consumer price inflation, which previously receded from an 8.1% peak in Mid-2022 to 1.6% in September 2024, slowed to a six-month low in February of 1.8%, and all measures of core inflation in that economy were also lower in February than January. Because of this month’s spike in fossil fuel costs, February price data in Canada as elsewhere are more outdated than is typically the case. Canadian housing starts figures for February were also reported today, printing as a lower-than-forecast 238.5k, 4.9% lower than January’s annualized level and representing the fewest total in four months.
The NY regional Empire State monthly manufacturing survey index dropped back to a 3-month low of -0.2 this month, representing flat movement after back-to-back readings of +7.7 in January and 7.1 in February.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Canadian CPI, Chinese retail sales and industrial production, Chinese unemployment and property prices, Indian wholesale prices, Iran conflict update
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