In our nonfarm payrolls preview, we quoted JPMorgan’s Market Intel desk which said that “for this print, the stronger the better”, which by implication means that a poor number would be bad. By that logic, the actual number couldn’t be any worse, because moments ago the BLS reported that in February, the US lost 92,000 jobs, a huge drop from the downward revised (of course) 126K in January, and the second worst print since 2020 (only October’s shock -140K was worse), and this time, the massive drop can’t be dismissed as a one-time drop in government payrolls. The number of private payrolls dropped by 86K, also a huge miss to estimates of a 60K increase.

The February payrolls print was a six-sigma miss to the 55K median estimate, and came in 83K below the lowest estimate!

The change in total nonfarm payroll employment for December was revised down by 65,000, from +48,000 to -17,000, and the change for January was revised down by 4,000, from +130,000 to +126,000. With these revisions, employment in December and January combined is 69,000 lower than previously reported. 

On a nonseasonally adjusted basis, 563k jobs were added in February, lower than the BBG estimate of 800k. An important driver of the jobs miss was the revised birth-and-death model, which contributed only 90k to February’s nonseasonally adjusted estimate. That compares with 136k last February and 151k in February 2024.

One potential mitigating factor: the number of people who were unable to work due to weather surged to 228K in February, well above last year’s level 167K, due to the powerful winter storms hitting the US.

Looking under the surface does not reveal as silver lining: part-time workers dropped by 249K while full-time workers slid by 100K.

Perhaps the only silver lining was that native-born workers jumped by 877K (which was only a modest reversal of the 2.5 million drop last month), while foreign born workers dropped by 394K.

The unemployment rate rose from 4.3% to 4.44% vs estimates of an unchanged print, as the number of unemployed workers rose by 203K from 7.368MM to 7.571MM, while the civilian labor force was virtually unchanged (from 170.564K to 170.483K). Notably, the increase in unemployment was driven by an increase in the U-2 rate – those who lost their jobs – which went from 2.05% in January to 2.12% in February.

Both the labor force participation rate, at 62.0% (below the estimate of 62.5%), and the employment-population ratio, at 59.3%, changed little in February. These measures showed little change over the year, after accounting for the annual adjustments to the population controls. 

Turning to wages, average hourly earnings rose 0.4% MoM, same as January and above estimates of a 0.3% imcrease. This translated into a 3.8% YoY increase, up from 3.7% and the consensus of an unchanged print.

Some more details from the report

• The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in February but is up from 1.5 million a year earlier. The long-term unemployed accounted for 25.3 percent of all unemployed people in February. 
• The number of people employed part time for economic reasons decreased by 477,000 to 4.4 million in February. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• The number of people not in the labor force who currently want a job changed little in February at 6.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.6 million in February. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, decreased by 109,000 in February to 366,000. 

Turning to the establishment survey, which unveiled the shocking February drop, the BLS reported a broad-based decline, driven by striking employment workers:

• Employment in health care decreased in February, reflecting strike activity. Employment in information and federal government continued to trend down. Payroll employment changed little on net in 2025. 
• Health care employment declined by 28,000 in February, following a large increase in January (+77,000). Offices of physicians lost 37,000 jobs in February, primarily due to strike activity. Hospitals added 12,000 jobs. Over the prior 12 months, health care had added an average of 36,000 jobs per month. 
• Employment in information continued to trend down in February (-11,000). The industry had lost an average of 5,000 jobs per month over the prior 12 months.
• In February, federal government employment continued to decline (-10,000). Since reaching a peak in October 2024, federal government employment is down by 330,000, or 11.0 percent.
• Employment in social assistance continued its upward trend in February (+9,000), driven by individual and family services (+12,000).
• Transportation and warehousing employment changed little in February (-11,000). A job loss in couriers and messengers (-17,000) was partially offset by a gain in air transportation (+5,000). Employment in transportation and warehousing has declined by 157,000, or 2.4 percent, since reaching a peak in February 2025.
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; financial activities; professional and business services; leisure and hospitality; and other services.

Looking at the sectoral composition of hiring, it’s clear that strikes and weather were a drag:

• The net change in health-care payrolls declined steeply, to -28k in February from 77k in January. A strike by 31k employees at Kaiser Permanente contributed to the drop.
• Construction (-11k vs. 48k prior), retail trade (2k vs. 11k prior), and leisure and hospitality (-27k vs -12k prior) all contributed to the decline. Hiring in these sectors tends to be sensitive to weather conditions, suggesting the storms in early February – and perhaps payback from temperate weather in the first half of January – played a role in the weak February print.

In the household survey, the BLS updated the working age population calculations to reflect the latest US Census population count for 2025. The new controls led to a big change in the January estimate of various employment metrics. They

• Lowered the working-age population by 231k;
• Reduced the labor force by 1,417k;
• Cut the employment level by around 1,432k;
• Lowered the labor-force participation rate by 0.46 percentage point and the employment-to-population ratio by 0.47 ppt.
• Altogether, that lifted the unemployment rate by 4 bps.

Separately, the Bureau of Labor Statistics’ updated “birth-and-death” model of business formations — which now incorporates current-month information — exaggerated the weaknesses.

Excluding the temporary effects, Bloomberg’s economists think payrolls probably are growing at a pace of around 20k per month. That’s slightly below the breakeven pace, explaining the rise in the unemployment rate for the month.

While we will have more to say about this report, the kneejerk reaction is, well, bad: this was about as ugly as it could be, and coming in a time when input costs are soaring due to the Iran war, it screams AI-driven stagflation. Indeed, Bloomberg’s Anna Wong hesitates to dismiss the weakness as entirely temporary, a study by Bloomberg Economics and Bloomberg Intelligence of corporate earnings-call transcripts flags that companies across a broad set of industries intend to keep hiring flat this year.

Still, Wong writes that We see the labor market as cooling rather than deteriorating sharply – but the softness in hiring reinforces the case for Fed rate cuts later this year.

The United Arab Emirates is pissed after Iran targeted Dubai and other US allies with over 1,000 drones and missiles in retaliation for US-Israeli attacks over the last week – and is now weighing freezing billions of dollars in Iranian assets held in the Gulf state, according to the WSJ, citing people familiar with the discussions. If that happens, it could sever one of Tehran’s most vital economic lifelines. 

For years, the United Arab Emirates has functioned as a financial hub for Iran, including wealthy individuals, businesses, and accounts associated with the Islamic Revolutionary Guard Corps (IRGC). While some of that (if not most) is legitimate business, the UAE has also been used to launder money through ‘shadow banking’ and other schemes – something the UAE has worked with the west (probably not that hard) to combat.

The UAE has been a ‘Switzerland’ of sorts – welcoming capital from around the world with little judgement, including happily doing business with Russian commodities traders and bankers following the invasion of Ukraine, despite US officials insisting that they ramp up scrutiny on money flows and crack down on sanctions evasion. In 2022, Paris-0based Financial Action Task Force placed the UAE on its “gray list” for failing to combat money laundering and terrorism financing.

In 2024, $9 billion linked to clandestine Iranian financial activity passed through UAE-based firms, largely connected to oil sales by Iran-linked companies in Dubai, according to the Treasury Department. 

Iranian Funds for Hezbollah Are Flowing Through Dubai (WSJ)

Treasury Sanctions Iranian Network Laundering Billions for Regime Through Shadow Banking Scheme (US Treasury)

After the UAE closed a handful of accounts held by Russian oligarchs and oil traders at the behest of US officials, the FATF removed them from their list for strengthening their anti-money-laundering policies. But they still hold billions in Iranian assets, and they’re not to happy about being targeted in retaliation strikes – which have caused damage at a Dubai airport, residential and tourist areas around the Burj Al Arab hotel, and the Palm Jumeirah man-made island. 

Tehran has been selling oil on the international market to fund the IRGC as well as other parts of their defense and security complex, through this shadow banking scheme, according to Treasury.

As such, any move to limit Iranian financial activities – which would likely not apply to all accounts held by Iranian companies and nationals (hundreds of thousands of whom live in the UAE) – “would be very significant, because the U.A.E. is the most important conduit for Iran’s engagement with the global economy,” said Esfandyar Batmanghelidj, chief executive of Iran-focused think tank Bourse & Bazaar, in a statement to the Journal. 

U.A.E. authorities are weighing several measures to dismantle illicit Iranian operations, officials familiar with the matter said. They range from freezing the assets of U.A.E.-based shadow companies used to mask trade to a sweeping financial crackdown on local currency exchanges which are used to move money outside of formal banking channels.

If the U.A.E. decides to move on Iran’s shadow-financing empire, a prime target would be accounts affiliated with the Islamic Revolutionary Guard Corps, the powerful group responsible for defending and perpetuating the regime, the officials familiar with the discussions said.

That said, the UAE is also carefully weighing the risks of an asset freeze – as they’re concerned that it may trigger prolonged retaliation by Iran against the Emirati territory and their critical energy infrastructure. It would also damage their ability to attract and retain capital from other sensitive countries such as Russia. 

“This is the most important nonmilitary lever the U.A.E. have to play against the Iranians,” said Andreas Krieg, a senior lecturer at the School of Security Studies at King’s College London, adding that a more targeted approach is the most likely course. 

Via Remix News,

The Eritrean migrant accused of dismembering his partner and the mother of his daughter was once held up as a “model migrant” 10 years ago in a variety of German newspapers. These papers reported that he was an example of how “integration” could work.

Today, 41-year-old Asmerom G. is accused of butchering his own wife. In fact, authorities have still not found her head.

German media were still singing his praises in 2016. The man from Eritrea had landed a job as an electrical assistant at a firm in Rheinbach, in North Rhine-Westphalia, and gave interviews about leaving his homeland three years earlier to escape political persecution.

He wanted German citizenship, he said. His boss at the time was quick to describe Asmerom G. as talented, reliable, and “capable of anything,” according to Bild newspaper.

However, then reality arrived. Within a year, Asmerom G. was in trouble with the law. A brawl led to a conviction for grievous bodily harm at Siegburg District Court, earning him a six-month suspended sentence.

He moved on from Rheinbach and took up work behind the wheel of a freight truck.

Somewhere along the way, he made a trip back to his home country — for reasons that remain unclear — and returned to Germany with a woman named Weghata A., who was 31, his wife under Eritrean law.

On July 26, 2025, she delivered their daughter.

Three months later, Weghata A. was dead.

What happened next garnered headlines across Germany.

On Nov. 17, on Autobahn 45 near Olpe on Nov. 17, a driver said she spotted something on the side of the road. When officers investigated, they found two severed women’s hands. Forensic teams matched the fingerprints to Weghata A., who had already been reported missing from her asylum accommodation in Bonn, where she had been living alone with her infant daughter.

Days later, Weghata A.’s torso was recovered, but her head remains missing.

The baby was found the day before, alive and unharmed, abandoned in a stroller in Hesse outside the Kröffelbach monastery in Waldsolms. A monk found the child and two handwritten notes giving only her name and date of birth.

While investigators quickly identified Asmerom G. as the prime suspect, he had already boarded a flight to Ethiopia. He was arrested there in late November.

In early February, he was extradited back to Germany, where he is now in pre-trial detention.

Read more here…

The Trump-ordered US-Israeli attack on Iran is continuing to create an array of ‘unknowns’ while steadily drawing in outside powers, with the most significant Friday development being The Washington Post reporting that Russia has been providing Iran with intelligence on the locations of US military assets in the Middle East, including warships and aircraft.

US officials described the effort as “a pretty comprehensive effort” by Moscow, though the accuracy of the intelligence remains unclear – the paper admits. What follows is the money quote:

“Russia is providing Iran with targeting information to attack American forces in the Middle East, the first indication that another major US adversary is participating – even indirectly – in the war, according to three officials familiar with the intelligence.”

The report cites three officials familiar with the intelligence, who spoke about the support on condition of anonymity due to the sensitivity of the issue.

“The targeting information has included the locations of American warships and aircraft in the Middle East, the officials said,” WaPo writes.

A couple of contextual issues: it remains that the ‘fog of war’ and propaganda is very heavy – and so such allegations especially from an ultra-heart-of-the-establishment D.C. beltway publication should be treated with caution and skepticism.

It is meant to keep pressure and scrutiny on Moscow at a moment the world’s attention is wholly fixated on the Iran theatre. 

However, it also makes perfect sense that Moscow would support a remaining Middle East ally (after the fall of Assad in Syria), given that Russia and Iran signed a strategic partnership agreement earlier this year expanding military and defense cooperation. Despite that, Hegseth said earlier in the week that Russia is “not really a factor” in the conflict.

If the report is accurate, what might this look like on the ground? Here’s an example of the possible implications:

New investigations by CNN reveal that Iran successfully destroyed an advanced U.S. radar system located inside Jordanian territory.

According to CNN’s analysis of satellite imagery, the radar installation appears to have been completely destroyed. The investigation also indicates that buildings housing similar radar systems at two additional locations in the United Arab Emirates were reportedly targeted in separate attacks.

Above: this is over 500 miles from Iran.

Could the Iran war eventually emerge as the next ground zero Mideast proxy battleground between the US and Russia? It remains unlikely that Moscow will get involved too directly, given also it has a costly war with Ukraine to run; however, this alleged heightened intelligence sharing with Tehran points to a first step of sorts.

From the Kremlin’s point of view, Washington has already long been doing the same, and in a major way, in the context of the Ukraine proxy war.

This morning’s retail sales data is for January (still lagging due to the govt shutdown) and is expected to be a decline (BofA’s omniscient analysts see a worse than consensus drop MoM, due in large part to weather disruptions).

The actual print was a decline but slightly better than expected at -0.2% MoM. Despite two months of no increase, sales rose 3.2% YoY in January (increased from December)

Source: Bloomberg

The decline was driven by a decline in sales at gas stations (lower gas prices) and Health Personal Care Stores. Motor Vehicles sales also dropped MoM. Non-store (online) retailers saw sales surge MoM…

Even though December’s seasonally-adjusted move was disappointing, it was a record high on a non-seasonally adjusted basis and January saw the usual big post-Xmas hangover plunge…

Source: Bloomberg

A lengthy winter storm that included significant snowfall and ice across the central and eastern US likely impeded shoppers during the weather event. The Arctic blast triggered the most flight cancellations since the pandemic and left more than 1 million homes and businesses without power.

Receipts at restaurants and bars, the only service-sector category in the retail report, declined 0.2% in January. Restaurants including Sweetgreen Inc. and Chipotle Mexican Grill Inc. said that sub-freezing temperatures and winter storms hindered sales.

The report showed a 0.3% increase in so-called control-group sales – which feed into the government’s calculation of goods spending for gross domestic product. The measure excludes food services, auto dealers, building materials stores and gasoline stations.

The war has entered its seventh day, but there could be a glimmer of hope for some kind of diplomatic-led offramp as Iranian President Masoud Pezeshkian indicated Friday that several countries have begun mediation efforts to end the war with the United States and Israel, but insists negotiations must confront those who started the conflict. “Some countries have begun mediation efforts. Let’s be clear: we are committed to lasting peace in the region, yet we have no hesitation in defending our nation’s dignity and sovereignty,” Pezeshkian wrote on X.

“Mediation should address those who underestimated the Iranian people and ignited this conflict,” he added. The mood over at the White House seems one of trying to get the unanticipated after-effects and especially the ongoing fierce Iranian retaliation on Gulf targets under control. Tehran overnight and into Friday saw the heaviest bombardment yet of the Iranian capital.

Massive explosions rocked residential neighborhoods and areas near Tehran University, as US and Israeli strikes targeted sites linked to Iran’s military and political leadership, with Al Jazeera’s correspondent reporting that the intensity of the bombardment exceeded anything seen earlier in the war. “I can say that compared to previous days, we saw heavier bombardment overnight, at least in the capital,” the report said. CNN also now belatedly has a war correspondent on the ground in Iran.

Notably, some of the latest strikes hit areas near Pasteur Street, a heavily secured district that houses key government institutions and where Iran’s supreme leader and several family members were killed in the opening hours of the conflict. Israel is vowing attacks marked a “new phase” of the war.

According to the Israeli military, about 50 fighter jets struck an “underground bunker” in Tehran that had been constructed for the late supreme leader, which allegedly extended beneath entire streets in central Tehran and contained meeting facilities used by senior officials even after the leader’s death.

Iranian FM and IRGC defiant…

Plan A for a clean rapid military victory failed, Mr. President. Your Plan B will be even bigger failure.

The truth: Chance for unique deal burned after the ‘America Last’ cabal obscured “significant progress” we made in negotiations.

‘Israel First’ always means ‘America Last’

— Seyed Abbas Araghchi (@araghchi) March 5, 2026

Israeli officials further claim the campaign is beginning to expose fractures inside Iran’s military chain of command; however, some reports have said various units could be acting autonomously under emergency orders to unleash full retaliation.

The United States has also made clear it is escalating its operations, with B-2 bombers having dropped dozens of bunker-busting “penetrator” bombs on deeply buried ballistic-missile launch sites across Iran. War Secretary Pete Hegseth has warned that the air campaign is “about to surge dramatically” – with President Trump also not showing signs of backing down, describing that the military operation is advancing faster than expected.

Iran is being demolished “ahead of schedule and at levels people have never seen before,” Trump asserted, claiming the country now has “no air force, no air defense” and that its air power is “gone.”

Since last Saturday at least 1,332 Iranians have been killed, but the death toll could be much higher amid ongoing rescue efforts of people under the rubble in heavily hit areas. Iranian media has reported that missiles struck two schools in the town of Parand southwest of Tehran, in the latest.

But Iran does continue to retaliate across the region. In Israel, by all appearances the number of inbound ballistic missiles has slowed significantly compared with the opening days of the war. Israeli officials say roughly 90 missiles were fired on the first day, about 60 the following day, and around 20 per day since Monday. In total, Iranian media claim roughly 500 ballistic missiles have been launched during the conflict – possibly most of them intercepted, but a significant amount making impact and causing severe damage.

NEW: US-Israeli jets struck Ilam hard. pic.twitter.com/aHQqPaRi3f

— Levent Kemal (@leventkemaI) March 6, 2026

Late Thursday night Tel Aviv came under combined missile and drone attacks, though medics reported no injuries following the latest barrage in southern Israel. Still, the Islamic Revolutionary Guard Corps (IRGC) says its “new-generation missiles struck American bases in Gulf countries” and Israeli targets including “Ben Gurion Airport, Haifa and Tel Aviv.”

Iranian forces also claim to have attacked a “US-owned” oil tanker off the coast of Kuwait, leaving the vessel on fire, according to Iranian state radio. Iranian state television reported that large numbers of drones launched by the army targeted American military bases in Kuwait.

“These attacks will continue in the coming hours,” the military said. Iranian drones have targeted countries across the Gulf from the United Arab Emirates to Qatar and Bahrain. Azerbaijani officials said Iranian drones crossed their border and injured four people in the Nakhchivan exclave, prompting Baku to withdraw diplomatic staff from Iran for safety.

⚡️ Iranian drones target two hotels and a residential building in Bahrain’s capital, Manama. pic.twitter.com/MASF5PQJQd

— War Monitor (@WarMonitors) March 5, 2026

In Lebanon, Israeli airstrikes pounded towns in the south and east of the country as well as Beirut’s southern suburbs after the Israeli military issued mass evacuation orders for large sections of the capital. The United Nations says nearly 100,000 people have been displaced in Lebanon and thousands of Syrian refugees have fled back across the border.

The conflict is further drawing in outside powers, with the most significant development being The Washington Post reporting that Russia has been providing Iran with intelligence on the locations of US military assets in the Middle East, including warships and aircraft. US officials described the effort as “a pretty comprehensive effort” by Moscow, though the accuracy of the intelligence remains unclear.

This is also when the ‘fog of war’ and propaganda is very heavy – and so such allegations especially from an ultra-heart-of-the-establishment D.C. beltway publication should be treated with caution and skepticism. However, it would make perfect sense that Russia is helping its Mideast ally, given that Russia and Iran signed a strategic partnership agreement earlier this year expanding military and defense cooperation. Despite that, Hegseth said earlier in the week that Russia is “not really a factor” in the conflict.

So you’re telling me that the US supplying Ukraine with intelligence, weapons and missiles to hit Russia has consequences? https://t.co/hrkwtyGhQK

— Mark Ames (@MarkAmesExiled) March 6, 2026

Meanwhile in the ultimate irony of ironies, Financial Times is reporting US officials are discussing the purchase of Ukrainian-made drone interceptors to counter Iranian drones, which some analysts say have proven harder to stop than expected. Patriot missile interceptors used by US allies cost more than $4 million each, while the Ukrainian systems are significantly cheaper and designed to defeat the same Shahed-type drones used by Russia.

Back in Iran, ‘Pro-regime’ sentiment making itself known, with across the country large crowds gathering for the first Friday prayers since the war began. Tens of thousands of worshippers carrying portraits of the slain supreme leader chanted anti-US and anti-Israel slogans despite the ongoing bombardment. There have also been “death to the Shah” type chants heard, amid reports that Trump wants to have a hand in directly choosing a puppet leader for Iranians.

First Friday prayers since massive attacks started:

Friday prayers under Trump missiles in the city of Tabriz.

Iranians are not intimidated. pic.twitter.com/WXcwlz1Ixi

— Seyed Mohammad Marandi (@s_m_marandi) March 6, 2026

Meanwhile the conflict continues disrupting global energy flows. But as we’ve been highlighting, that means: “We are seeing a significant increase in demand for Russian energy resources in connection with the war in Iran,” Kremlin spokesman Dmitry Peskov said. Russia remains “a reliable supplier of oil and gas,” he added.

Western MSM has tended not to show the large pro-government demonstrations which had been on and off since January, in tandem with the anti-Tehran protests and clashes:

⚡️⭕️ Massive continuous demonstrations in various Iranian cities in support of the armed forces demanding revenge, for the 6th day in a row

It’s an uprising pic.twitter.com/BxuvKwxi4d

— Middle East Observer (@ME_Observer_) March 6, 2026

International Energy Agency director Fatih Birol says global markets still have ample supply. “We have no oil shortage … there is a huge surplus,” he said. But Qatar’s energy minister Saad al-Kaabi offered a far more pessimistic outlook, warning it could take “weeks to months” for energy exports to normalize even if the war stopped immediately.

“Everybody’s energy price is going to go higher,” he said. “There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”

On the airspace closure and travel front, the widening war is also triggering evacuations and security concerns far beyond the battlefield, with thousands of travelers still stranded across the region as airlines cancel flights, though Emirates says it transported roughly 30,000 passengers out of Dubai in a single day and expects to restore its full flight network soon. Limited commercial flights have resumed from Israel.

Footage circulating online shows people chanting ‘death to Pahlavi’ in the Khuzestan province in southwest Iran

Protesters were referring to Reza Pahlavi, the son of the last shah living in exile in the US, who has spearheaded a movement advocating for the monarchy’s restoration pic.twitter.com/i4OxP90VtK

— Middle East Eye (@MiddleEastEye) March 5, 2026

In Britain, counterterrorism police arrested four men on allegedly suspicion of spying on the Jewish community for Iran. The Metropolitan Police said the suspects – one Iranian national and three dual British-Iranian citizens – were detained early Friday morning in Barnet and Watford. Meanwhile, international pressure continues mounting over civilian casualties – while at the Pentagon there has not been any new casualty update since six American troops were confirmed killed in the opening days of Operation Epic Fury.

Seven days into the war on Iran and markets are getting increasingly shaky. US equity futures tumbled ahead of the February jobs report, and are on pace to close the worst week for global markets since 2020 deep in the red as the selloff in global bonds deepened after another jump in oil prices fanned fears that the war in the Middle East is fueling inflation. As of 8:00am ET, S&P 500 futures were 0.7% lower while contracts on the Nasdaq 100 fell 0.9% with all Mag7 names lower in premarket trading (NVDA -0.9%, GOOGL -0.6%). The yield on 10-year Treasuries climbed four basis points to 4.18%, on course for its biggest weekly advance since April as global government bonds tumble amid upside risks to inflation from higher energy prices. The dollar gained 0.2% while gold approached $5,100 an ounce. Commodities are mostly higher: Oil added another 6% with WTI now at $86.25; Oil prices are set for their strongest week since 2022, with the war in the Middle East effectively closing the Strait of Hormuz to shipping. Precious metals are mixed (gold down, silver +0.8%); base metals are lower. Overnight, the biggest catalysts was another escalation in Middle East with some articles pointing to potential shutdown in energy exports from Gulf states. Today’s US economic data slate includes February jobs report, January retail sales (8:30am), December business inventories (10am) and January consumer credit (3pm). Fed speaker slate includes Waller (7:30am), Daly (8:30am, 10:15am), Goolsbee (9:50am), Paulson (10:15am), Miran (11:30am), Collins (1:20pm) and Hammack (1:30pm, 3:10pm).

In premarket trading, Magnificent Seven are lowe (Microsoft -0.3%, Meta -0.5%, Tesla -0.6%, Alphabet -0.9%, Apple -0.7%, Amazon -1%, Nvidia -1.3%)

• Energy stocks are rising and airline stocks are declining as oil prices hit their highest level since 2024 and gas prices gained as the Iran conflict disrupted shipping through the Strait of Hormuz, limiting oil supply.
• Gap Inc. (GAP) falls 8% after reporting fourth-quarter sales and profit that came in slightly below expectations, as two of its apparel chains underperformed. Old Navy, the company’s biggest brand, and Athleta, its smallest, missed comparable-sales estimates.
• Guidewire Software (GWRE) rises 3% after the company reported second-quarter results that were much stronger than expected. It also raised its full-year forecast.
• Marvell Technology (MRVL) rallies 11% after the chipmaker said its year-over-year revenue growth rate will accelerate each quarter throughout fiscal 2027, a bullish target that shows soaring demand from data center-related applications.
• Nutex Health Inc. (NUTX) plunges 28% after the health-focused application software firm reported revenue for the fourth quarter that missed the average analyst estimate.
• Samsara (IOT) climbs 11% after the technology firm reported fourth-quarter adjusted earnings per share that topped the average analyst estimate.
• Trade Desk (TTD) slips 1% after Wedbush downgraded the advertising technology company to underperform — a sell equivalent — from neutral, saying the impact of an OpenAI partnership is “overestimated.”

In corporate news, Anthropic vowed to legally contest a Pentagon decision to declare it a threat to the US supply chain under an authority normally reserved for foreign adversaries, escalating a showdown with the Trump administration over AI safeguards.

The Iran war has entered its seventh day, with Iran firing a barrage of missiles and drones across the Persian Gulf and Israel renewing its airstrikes. Qatar’s energy minister sparked a powerful spike in energy price after he warned that war in the region could “bring down the economies of the world” and predicted that all Gulf energy exporters would shutter production within weeks, in an interview with the Financial Times. This is precisely what we warned about yesterday in “JPMorgan’s New Hormuz Closure Math: Just 3 Days Until Commodity Chaos.” 

In the latest developments in the Middle East, Iran fired a barrage of missiles and drones targeting countries across the Persian Gulf overnight, while Israel renewed airstrikes on the Islamic Republic in a war that’s entered a seventh day with no end in sight. Saudi Arabia, Kuwait and Bahrain were among those came under renewed attack from the Islamic Republic, while Israeli airstrikes hit Tehran and Beirut.

Trump told NBC News that he wants Iran’s leadership structure fully removed, and that he has some names in mind for a “good leader.” The financial and logistical troubles the Iran war is causing for the global aviation industry are compounding by the day, with the number of canceled flights to Middle East hubs surpassing 27,000 since fighting began even as carriers look to resume some operations.

Still, US stocks are set to outperform global peers in a week that saw Middle East conflict drive fears of energy-driven price pressures, as traders awaited US jobs and retail sales data for insight into the Federal Reserve’s appetite for rate cuts.

That’s the good news for Trump, the bad news is that retail gasoline hit $3.32 a gallon on Thursday as the Iran conflict disrupts energy supplies from the Middle East. At the same time, the selloff in global bonds deepened on concern the shock to energy markets could broaden and drive inflation higher.

Friday’s market moves are capping a week of sharp swings in which investors repeatedly recalibrated their outlook on the impact of the US-Israeli war against Iran. Fears that a near-complete halt in traffic through the Strait of Hormuz could trigger a new inflation spike have led investors to scale back bets on Federal Reserve interest-rate cuts.

“This is an anxiety not only about how long the conflict goes on, but what kind of effect it’s going to have on the mix between growth and inflation,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group Inc., told Bloomberg TV. “The issue really is 20% of world supplies are going through that channel, it’s obviously very, very significant.”

Today’s jobs report may offer more insight on the Fed’s rate path. Headline NFP print estimate is currently 55k, down from 130k last month with unemployment rate expected unchanged at 4.3%. Bloomberg whisper number for headline print is currently 55k (our full preview is here). 

“The market would likely interpret robust job creation as evidence that the US economy remains on solid footing,” said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. “This would accelerate the current rapid return to US equities and further fuel the reverse rotation we’ve observed over the past two weeks.”

Anna Wong, Chief US Economist at Bloomberg Economics, expects a tepid job report, largely reflecting temporary disruptions.
She forecasts the US economy to have added just 13,000 jobs in February, down from 130,000 in January. The consensus among analysts is for 55,000, and the “whisper” is for 65,000.

“For this print, the stronger the better given the increase in inflation expectations due to energy prices,” the JPMorgan Market Intelligence desk led by Andrew Tyler says. “A weaker number will increase rate cut expectations, but the risk is stagflation in the near-term given the expected increase in inflation.”

Bond yields are ticking higher heading into the print, and the dollar is muted, with markets pricing in less than 40 basis points of rate cuts for the rest of this year. In another sign of risk aversion, gold remains on track for its first weekly decline in over a month, pressured by a stronger dollar and inflationary risks tied to the Middle East conflict.

Traders slashed bets on Bank of England rate cuts for 2026, pricing just about a 50% chance of a quarter-point move. The yield on two-year gilts surged 13 basis points to 3.93%. Money markets are also fully pricing in that the European Central Bank will raise borrowing costs this year, a turnaround from a week ago when a cut was viewed more likely.

European stocks are now in the red after opening higher. Energy is up, while media, construction and technology sectors fall. Here are some of the biggest movers on Friday:

• Lufthansa shares climb as much as 4% after Europe’s largest carrier reported strong results and said it sees “significant” improvement in earnings in 2026.
• SFS rises as much as 6.1%, recovering some of this week’s losses, after the maker of components for the construction and automotive industries delivered better-than-expected results, according to analysts.
• ITV shares climb as much as 8.1% after Kepler Cheuvreux analyst Conor O’Shea raised his recommendation on the stock to buy from hold as he sees the weakness in advertising demand dissipating.
• Engineer IMI shares rise as much as 4.6% after the company delivered results ahead of expectations and announced a new £500 million buyback, supported by solid cash conversion.
• Zealand Pharma shares sink as much as 33%, the most on record, after mid-stage trial results for its experimental obesity shot being developed with Roche fell short of expectations.
• BE Semiconductor Industries shares fall as much as 12% as traders point to an article in Korean media on high-bandwidth memory.
• Infineon shares fall as much as 4% after UBS cut the recommendation on the chipmaker to neutral from buy, seeing limited upside to the firm’s margins and 2027 AI outlook, and growing inventory risk from a slowdown in China.
• Comet shares drop as much as 13% after the supplier of radio-frequency tools reported Ebitda for the full year that missed the average analyst estimate.
• Spie shares slide as much as 5.5% after the technical services provider delivered softer fourth-quarter organic growth across the majority of divisions, while consensus had already anticipated the improved mid-term margin goal, according to analysts at Jefferies.
• UCB drops as much as 2.9% after Morgan Stanley downgrades the stock to equal-weight from overweight, citing increasing concerns around the Belgian biopharmaceutical company’s growth story

In FX, the greenback advances with the Bloomberg Dollar Spot Index rising 0.2%. 

In rates, treasury futures continue to be pressured, sitting on session lows into the early US session as WTI futures extend their climb through $86 barrel, higher by another 6% on the day. US yields cheaper by 2bp to 5bp across the curve in a bear flattening move with 5s30s spread down around 2bp on the day. US 10-year yields trade close to highs of the day around 4.17%, with gilts leading the selloff in bonds with UK two-year yields up 11 bps as traders pare bets on easing by the BOE this year. In Europe, bonds underperform further with front-end gilts cheaper by 12bp on the day. US session focus includes February nonfarm payrolls at 8:30am New York. Fed cut premium continues to fade out of front-end swaps, which now price in around 32bp of rate cuts for the year and the first full 25bp move priced out to the October meeting. In Europe, a full rate hike is now priced by the end of the year. Treasury auctions resume next week with 3-, 10- and 30-year sales for a combined $119 billion.

This week’s spike in Treasury yields is a sharp reversal from last month when they notched their sharpest drop in a year. Swaps now price between one and two Fed cuts for 2026 compared to as many as three a week ago. The dollar, meanwhile, has reclaimed its status as the ultimate haven as it headed for its best week in more than three years.

“Unless there can be some real political breakthrough that leads to a ceasefire, the dollar won’t be ready to resume a decline anytime soon,” ING Bank strategist Chris Turner wrote in a note. “The story will remain one of governments trying to handle the fallout of high energy prices, a negative for bond markets around the world.”

In commodities, Brent crude futures climb to a fresh high this week above $88 a barrel while European natural gas futures also rise after Qatar’s energy minister told the Financial Times the Middle East conflict will likely force Persian Gulf countries to halt energy exports.

Today’s US economic data slate includes February jobs report, January retail sales (8:30am), December business inventories (10am) and January consumer credit (3pm). Fed speaker slate includes Waller (7:30am), Daly (8:30am, 10:15am), Goolsbee (9:50am), Paulson (10:15am), Miran (11:30am), Collins (1:20pm) and Hammack (1:30pm, 3:10pm).

Market Snapshot

• S&P 500 mini -0.6%
• Nasdaq 100 mini -0.8%
• Russell 2000 mini -0.5%
• Stoxx Europe 600 -0.4%
• DAX -0.2%
• CAC 40 -0.3%
• 10-year Treasury yield +3 basis points at 4.17%
• VIX +0.4 points at 24.19
• Bloomberg Dollar Index +0.1% at 1205.77
• euro -0.2% at $1.158
• WTI crude +3.9% at $84.13/barrel

Top Overnight News

• U.A.E. Explores Freezing Iranian Assets to Punish Tehran for Attacks: WSJ
• Oil Soars as Iran War Threatens Long Energy Outage; WTI Crude Tops $85 a Barrel as War Paralyzes Hormuz Traffic: BBG
• Israeli Military Moving to ‘Next Phase’ of Iran Campaign: WSJ
• Iran barrage sweeps Mideast as Trump weighs in on succession: BBG
• Iran says countries have begun mediation efforts: WSJ
• Iran’s Attacks on the UAE Are Costing It Access to Vital Imports: BBG
• Tehran Is Fighting With Jets That Date Back to the Vietnam War: WSJ
• Trump on rising gas prices during Iran operation – ‘If they rise, they rise’: RTRS
• SoftBank Seeks Record Loan of Up to $40 Billion for OpenAI Stake: BBG
• Drone strike drives calls to end British military presence on Cyprus: RTRS
• Trump Faces Criticism From UAE Business Community Over Iran War: BBG
• Israel targets bunker beneath Khamenei’s compound in new wave of attacks: RTRS
• Israel’s Hezbollah attacks are likely to continue beyond Iran war: RTRS
• Turkey asks Britain’s MI6 to step up protection of Syria’s Sharaa: RTRS
• Wealthy Moscow cuts investment, revealing Russia’s deeper budget problems: RTRS
• Axel Springer Strikes $770 Million Deal for U.K.’s Daily Telegraph: WSJ
• Texas Republican Ends Re-Election Bid After Affair: AP

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded somewhat mixed following the risk-averse mood in the US as geopolitics continued to dominate headlines, and with participants also cautious heading into key US jobs data. ASX 200 was dragged lower as the heavy losses in miners, materials and resources sectors offset the gains in tech and telecoms, while recent higher energy prices stoke inflationary concerns and narrow the policy space for the RBA. Nikkei 225 traded indecisively and swung between gains and losses with very little fresh macro catalysts for Japan. Hang Seng and Shanghai Comp trade higher, albeit to varying degrees, with the mainland rangebound, while Hong Kong outperforms amid tech strength and as participants reflected on recent earnings from the likes of JD.com and Bilibili.

Top Asian News

• Japan’s Finance Minister Katayama said Japan is ready to take timely steps against the economic impact from the Iran conflict, adds Japan is not fully out of deflation. Japan is ready to act on market volatility while consulting international authorities. Bank of Japan’s monetary policy is focused on inflation and not on currency intervention. Wage gains are not BoJ’s direct target but is key to price stability.
• PBoC adviser Huang Yiping said China’s push to shift its economy towards consumer spending will take a long time, according to Bloomberg. Investors should dampen expectations for “aggressive” stimulus as the government doesn’t view it as a “crisis time”.

European bourses (STOXX 600 -0.1%) initially traded mixed, but now hold a strong negative bias as the risk tone soured. Little driving the latest downturn, but with focus remaining on the geopolitical situation. European sectors were initially mixed, but now hold a negative bias. Energy takes the top spot, buoyed by strength in underlying energy prices, whilst Industrials is lifted by Defence names. To the downside, Media lags, hampered by post-earning losses in UMG (-5.5%).

Top European News

• EU GDP Growth Rate YoY 3rd Est (Q4) Y/Y 1.2% vs. Exp. 1.3% (Prev. 1.4%, Low. 1.3%, High. 1.3%)
• EU Employment Change QoQ Final (Q4) Q/Q 0.2% vs. Exp. 0.2% (Prev. 0.2%)
• UK Halifax House Price Index YoY (Feb) Y/Y 1.3% vs. Exp. 0.9% (Prev. 1.1%, Rev. From 1%, Low. 0.5%, High. 0.9%).
• UK Halifax House Price Index MoM (Feb) M/M 0.3% vs. Exp. 0.3% (Prev. 0.8%, Rev. From 0.7%).
• Norwegian Manufacturing Production MoM (Jan) M/M -0.3% (Prev. -0.1%).

FX

• DXY is relatively flat with a mild upward bias after a session of gains on Thursday. Thursday’s action was spurred by a haven bid, and as yields climbed on firmer oil prices, in addition to well-received data ahead of NFP.
• EUR/USD returned below the 1.1600 handle after initially reclaiming the level in APAC trade, with downside exacerbated by the ongoing geopolitical and energy-related concerns, alongside the firming USD as traders flock to the haven. Little reaction to the rhetoric from ECB officials. Meanwhile, traders fully price in a 25bps ECB hike this year, Bloomberg reported. EUR/USD trades in a 1.1583-1.1621 range, within Thursday’s 1.1559-1.1647.
• GBP/USD is subdued amid the recent USD strength but remains tucked within yesterday’s 1.3297-1.3387 range. News flow for the UK remains light, but recent headlines centre around UK PM Starmer’s shift from initially refusing to assist US military operations against Iran to later granting access to British military bases for “limited” and “defensive” purposes.
• USD/JPY is firmer with the JPY the underperforming G10 amid a rise in US yields and given Japan’s exposure to energy imports. The pair traded sideways for most of the APAC session, given the indecisive mood in Japan; although, it gradually edged higher as domestic sentiment stabilised.
• Antipodeans are mixed, the AUD mildly outperforms amid gains in copper and gold prices and as recent inflationary concerns spurred some outside bets for a rate hike by the RBA this month. AUD/USD trimmed gains after hitting an intraday peak of 0.7047 (vs low 0.7015). NZD/USD hit a current low of 0.5881 (vs high 0.5916), with the 200 DMA (0.5876).

Central Banks

• BoJ Deputy Governor Himino said Japan is seeing inflation in terms of rising consumer prices, adds BoJ is keeping monetary conditions accommodative and gradually adjusting degree of monetary accommodation. Will continue to scrutinise market moves and their impact on the economy and prices. Rising import costs from a weak yen may affect inflation trends. BoJ policy is not aimed at FX rates, yet FX shifts impact inflation and the economy.
• ECB’s Escriva said it is highly unlikely the ECB touches rates at its next meeting.
• ECB’s Sleijpen said the ECB policy is still in a good place and data dependent.
• PBoC Governor said the central bank will flexibly use various monetary policy tools including interest rates and RRR cuts; PBoC said China has no intention to, not necessary to use FX rate to gain trade competitiveness.

Fixed Income

• USTs are lower. US paper spent much of the overnight session trading sideways, alongside weakness across the crude complex. However, as energy prices turned positive – the benchmark also dipped off best levels in the European morning. The geopolitical situation remains unchanged, with missiles being launched from both sides – but updates related to the Strait of Hormuz helped to improve sentiment, including; a) China is in talks with Iran to allow safe oil and gas passage through Hormuz, b) US allowed India to purchase Russian oil for 30-days. USTs now trade at the lower end of a 112-03 to 112-14+ range.
• Bunds follow peers, for the same reasons as above, and currently towards the bottom end of a 126.96 to 127.32 range. European newsflow has seen a few ECB speakers take to the wires, to generally touch on the Iran situation, whilst Escriva said it is “highly unlikely” that the ECB touches rates at it next meeting. From a yield perspective, the 10yr yield now trades at 2.868% (vs YTD high at 2.909%). Thereafter, 2.938%, a peak spurred by the mini-banking crisis surrounding the collapse of First Brands.
• Gilts underperform, lower by around 75 ticks and trades at the bottom end of a 90.43 to 91.25 range. Underperformance which can be explained by, a) net-importer of energy, b) BoE rate cut expectations entirely priced out for the year; pre-war pricing indicated a cut in either March or April. A lot of focus has been on the front-end Gilt situation, with the 2yr yield now surging beyond 3.90%, to now approach the 4% mark from mid-October 2025 – back where traders were increasingly sceptical of Chancellor Reeves and her Autumn Budget.

Commodities

• Crude benchmarks remain firmer, though are off their best levels seen yesterday, which saw Brent firmer by 4.9%, marking the highest close since the conflict between the US, Israel, and Iran began. As the conflict reaches its seventh day, there’s been little sign of a reprieve following comments by the Iranian Foreign Minister via NBC News that Iran is ready for a US ground invasion of the country, with further comments this morning via Al Arabiya where the FM said that Iran has no choice but to continue fighting. WTI and Brent are trading in the upper end of USD 78.24-82.93/bbl and 83.16-86.35/bbl, ranges respectively.
• In the precious metals space, spot gold briefly reclaimed the USD 5,100/oz level after facing pressure yesterday, when reports indicated the NBP is considering gold sales for defence funding, which saw the yellow metal fall below the USD 5000/oz mark. A slightly softer dollar and the Iranian conflict boosted haven appeal for gold during the APAC session. However, as the European session gets underway, the yellow metal has slipped below USD 5100/oz due to recent USD strength as the USD continues to be the preferred haven amid ongoing geopolitical tensions. XAU and XAG are trading within the upper end of USD 5066.93-5143.84/oz and 81.80-84.76/oz, ranges respectively.
• Base metals have rebounded from the prior day’s trough, largely underpinned by firmer APAC stocks. However, copper prices have seen slight pressure since the European session began, tracking headwind in European equities, thus weighing down the red metal. 3M LME copper trades within the lower end of a USD 12.87-12.91k/t range.
• US-sanctioned gas tanker reportedly transited the Strait of Hormuz this morning, according to Bloomberg; The Danuta I, sailed under the flag of Palau.
• US has issued a temporary 30-day waiver to allow sale of Russian oil currently stranded at sea to India, according to a report citing two officials. Officials say general licence only authorises transactions involving Russian oil already stranded at sea, unlikely to provide significant financial benefit to Russia.
• Trump admin reportedly rules out deploying Treasury Department to trade oil futures for now amid belief that it will have a limited meaningful effect, Bloomberg sources report.
• Japan is reportedly considering a release from its national oil stockpile, even without coordinated international action, Kyodo reported.
• Gold is being sold at a discount of as much as USD 30/oz in Dubai, Bloomberg reported citing sources; due to elevated shipping and insurance costs.
• Qatar Energy Minister al-Kaabi cautions that the Middle East conflict could cause all Gulf energy producers to have to shut production within weeks, increasing oil to USD 150/bbl, FT reported.
• India has asked all its refiners to ⁠maximise ⁠production of liquefied petroleum gas and make the fuel available only to three state-run ⁠companies – Indian Oil (IOCL IS), HPCL (HPCL IS) and BPCL (BPCL IS), a ⁠government cited by ET order showed.
• Reliance (REL IS) is looking to buy Russian oil after the US granted India a licence to temporarily buy cargoes, Bloomberg reported citing sources.

Geopolitics

• US President Trump said oil appears to have pretty much stabilised, and further action to reduce pressure on oil is coming, also said Iran wants to ‘make a deal’ to end the conflict.
• Iran reportedly targeted US bases in Kuwait with drones, according to Iranian State Media; Iran’s army says drone attacks against US bases in Kuwait to continue in the coming hours.
• Iran to use newer missiles in the coming days, Fars News reported.
• US Secretary of War Hegseth said US has just begun to fight in Iran and that Iran is wrong in its calculations if it thinks we can’t continue the war. Firepower used in Iran is to increase significantly.
• Maersk (MAERSKB DC) said it has decided to temporarily suspend services connecting the Middle East to the far East and Europe; decision has been taken as a precautionary measure.
• Iranian Foreign Minister said Iran has no choice but to continue fighting, Al Arabiya reported.
• US and Israel have increased airstrikes on Iran’s border with Iraq as US President Trump called on the Kurdish minority there to rise up against Iran’s government, according to Washington Post.
• Satellite imagery taken Tuesday shows extensive damage to Iran’s Khojir missile production site, according to Washington Post.
• US Central Command Commander said our operation against Iran is going well and we are moving at a fast pace. said:. Ballistic missile attacks by Iran have decreased by 90% since day one. As we transition to the next phase of the operation, we will dismantle Iran’s missile production capability.
• US House votes 219-212 to reject the war powers resolution on Iran.
• Foreign ministers of Arab League member states will hold an emergency meeting on Sunday to discuss Iran’s attacks on several countries in the region, WSJ reported. The meeting will be held via video conference, was requested by Saudi Arabia, according to Arab sources.
• Israeli PM’s aide said “so far the operation is proceeding as planned; we are seeing the first cracks in the regime, but patience is needed”; adds that US President Trump and Israeli President Netanyahu speak daily.
• Republicans are preparing to confront a huge price tag for the Middle East war following closed-door briefings which detailed the fast consumption of munitions and lack of any firm deadline for the campaign, Politico reported citing sources. Senior Republicans expect the administration to request tens of billions of dollars, with some lawmakers hearing estimates that the Pentagon is spending as much as USD 2bln/day.

US Event Calendar

• 8:30 am: United States Jan Retail Sales Advance MoM, est. -0.3%, prior 0%
• 8:30 am: United States Jan Retail Sales Ex Auto MoM, est. 0%, prior 0%
• 8:30 am: United States Feb Change in Nonfarm Payrolls, est. 55k, prior 130k
• 8:30 am: United States Feb Change in Manufact. Payrolls, est. -1.5k, prior 5k
• 8:30 am: United States Feb Unemployment Rate, est. 4.3%, prior 4.3%
• 7:30 am: United States Fed’s Waller on Bloomberg TV
• 8:30 am: United States Fed’s Daly on CNBC
• 9:50 am: United States Fed’s Goolsbee on Bloomberg TV
• 10:15 am: United States Fed’s Daly & Paulson Participate in Panel Discussion
• 11:30 am: United States Fed’s Schmid Speaks on Policy and Outlook
• 11:30 am: United States Fed’s Miran on CNBC
• 1:20 pm: United States Fed’s Collins Delivers Keynote Address
• 1:30 pm: United States Fed’s Hammack Speaks at Monetary Policy Forum
• 3:10 pm: United States Fed’s Hammack Appears on Bloomberg TV

Main Rating Changes:

DB’s Jim Reid concldues the overnight wrap

There’s not much synchronisation in markets at the moment as we welcome in another payrolls Friday today. This one will be obviously overshadowed by events in the Middle East. Indeed, the market selloff resumed over the last 24 hours, with equities and bonds posting fresh declines as the war in the Middle East showed no sign of ending. That’s raising fears about a more protracted conflict, with investors increasingly alarmed that the oil price spike will become entrenched, pushing up inflation around the world. Indeed, Brent crude was up another +4.93% yesterday to $85.41/bbl, closing at its highest level since mid-2024. And in turn, that’s meant investors have kept pricing out the chance of further rate cuts, leading to another spike in bond yields on both sides of the Atlantic. Indeed, 10yr bund yields (+9.0bps) posted their biggest daily jump in exactly a year, back when the debt brake reforms were announced. There has been some respite in the Asia session as there are some hopes that the US is looking at options to address the energy price spike.

The reality is though that we continue to trade competing headlines, with risk appetite swinging back and forth over the past 24 hours. At the outset yesterday, there was actually some optimism after Iran’s IRNA reported that the deputy foreign minister said they were ready to get rid of their uranium stockpile in the US talks, “provided we get something good in return”. However, any optimism that some kind of negotiated settlement could be enroute faded as the session went on, with signs that, if anything, the conflict was spreading. In fact, Azerbaijan was the latest country to be hit by Iranian drones, and their Defense Ministry said that “These acts of aggression will not go unanswered”. And elsewhere across the region, a refinery was struck in Bahrain and the US evacuated its embassy in Kuwait, while the UAE told Abu Dhabi residents to seek immediate shelter. Around the same time Trump suggested he wanted a say in the Iran leadership succession which potentially complicates prospects of a diplomatic resolution. And Iran’s Foreign Minister said that it currently saw no reason to engage in talks with the US.

We did see some improvement in market sentiment late in the US session, as Interior Secretary Doug Burgum said that the administration is looking at options to address the spike in oil and gasoline prices, with Reuters reporting that this could include potential action involving the oil futures market. Later in the evening the US issued a 30-day waiver for Indian purchases of Russian oil. According to Treasury Secretary Bessent, the measure is aimed at Russian oil that is already stranded at sea, so should be viewed as more of a short-term relief for Asian refiners. Coupled with Burgum’s comments, this has supported some reversal in oil price gains overnight, with Brent down -0.94% to $84.61/bbl as I type. S&P 500 futures (+0.22%) are a touch higher, while the dollar index is down -0.37% after yesterday’s +0.55% gain.
But net net, it’s been only a partial offset from yesterday’s news flow that saw Brent crude (+4.93%) rise to $85.41/bbl, whilst WTI (+8.51%) rose to $81.01/bbl, its biggest increase since May 2020. What’s been notable is that investors are increasingly pricing in an extended conflict, and we can see that from energy futures further out the curve. For instance, the Brent crude oil future for 12 months’ time was up another +1.58% yesterday to $69.90/bbl, which is their biggest increase so far this week. So in other words, there’s growing doubt that this is going to be over quickly.

With oil prices continuing to rise, investors grew more doubtful about central bank rate cuts this year, with the prospect of hikes even coming into view. That was particularly clear for the ECB, where a hike by December moved up to a 63% chance by the close, which is the first time in 2026 that it’s been above 50%. A 55% probability of a cut was priced in as recently as last Friday. So that contributed to a sharp selloff for European sovereign bonds, with yields on 10yr bunds (+9.0bps), OATs (+11.7bps) and BTPs (+13.2bps) all moving higher. Meanwhile, ECB officials struck a watchful tone over the situation, with Banque de France Governor Villeroy saying he didn’t see any reason today to raise rates, while ECB Vice President de Guindos said an extended war could raise inflation expectations and prompt a change in the policy stance.

It was a similar story in the US, where markets are now pricing in just 40bps of Fed cuts by December, the fewest so far this year. That came as Fed officials acknowledged the potential for inflation to rise, with Richmond Fed President Barkin saying “Gas prices, obviously, if they’re up, that is inflationary”. And remember that core PCE was already 3.0% before this latest shock, so investors have become increasingly sceptical that the Fed will be able to deliver rapid rate cuts under a new Chair. In addition, the latest weekly initial jobless claims were slightly beneath expectations, at 213k in the week ending Feb 28 (vs. 215k expected), so that added to the optimism ahead of today’s jobs report. And we saw more positive comments on the labour market from Fed Vice Chair Bowman, who said it showed more “signs of stabilizing”. So collectively, that data and the latest rise in oil prices pushed Treasury yields higher, with the 2yr yield (+3.1bps) up to 3.58%, whilst the 10yr yield (+3.9bps) moved up to 4.14%.

The US labour market will remain in the spotlight today, as we’ll also be getting the latest jobs report for February. In terms of what to expect, our US economists think that payrolls will be up +30k, coming down from the 13-month high of +130k in January. Then for unemployment, they see that remaining at 4.3%, but they note that carries elevated risks in both directions given that the BLS will implement their annual population controls. For more details, click here for their preview.

For equities, it was another rough day as fears mounted about a sustained oil shock. So the S&P 500 (-0.56%) moved back into negative territory for 2026, though it did recover from an intra-day low of -1.44% after the news that the US could intervene in energy markets.  Interestingly, software and services stocks were the standout outperformer (+1.84%), with that component of the index hitting a one-month high. This included a +1.59% gain for Oracle as Bloomberg reported that it is planning a round of job cuts. By contrast the Philadelphia semiconductor index fell -1.17% as Bloomberg reported that US officials were mulling regulations that would require approval for exports of AI chips to anywhere in the world. And it was a rough session more broadly, with consumer staples (-2.27%) and materials (-2.43%) stocks leading on the downside in the S&P amid the concern over energy costs. There were even bigger declines in Europe given their greater exposure to any energy shock. So the STOXX 600 (-1.29%) fell back, alongside declines for the DAX (-1.61%), the CAC 40 (-1.49%) and the FTSE 100 (-1.45%).

In Asia, the Nikkei (+0.51%) is recovering from initial losses but is still on course for a weekly decline exceeding -5.5%. Meanwhile, Chinese related stocks are making gains, with the Hang Seng (+1.85%) leading the way as it benefits from a rally in recently weakened technology shares, while the CSI (+0.20%) and the Shanghai Composite (+0.25%) are also experiencing modest increases. The KOSPI has recovered from earlier larger losses and is -0.15%, but still heading towards a weekly drop of more than -10%, and the S&P/ASX 200 (-1.03%) is trading notably lower, on track for a weekly loss of approximately -4.0%.

Finally, this weekend, there’s a German state election taking place in Baden-Württemberg, which will be the first of five regional elections this year. Our economists in Germany have a preview of the votes (link here), where they outline why the election outcomes matter for the stability of the Merz government. They point out that victories for the governing parties might positively impact reform momentum at the federal level over the spring/early summer. But they also point out that heavy losses have been a catalyst in the past for early federal elections, as seen in 2005 (after the SPD lost the key state of North-Rhine Westphalia) and in 2024 (after a series of electoral losses for the FDP).

Looking at the day ahead, the main data highlight will be the US jobs report for February, but we’ll also get US retail sales for January and German factory orders for January. From central banks, we’ll hear from the Fed’s Daly, Paulson, Collins and Hammack, long with the ECB’s Cipollone and Schnabel.

Authored by Chase Smith via The Epoch Times (emphasis ours),

Senate Democratic Leader Chuck Schumer (D-N.Y.) and 12 other senators introduced legislation on March 5 that would force the nation’s largest meatpackers to break up their operations across beef, pork, and poultry, in the latest push in the Democratic affordability agenda heading into the 2026 midterm elections.

The Family Grocery and Farmer Relief Act would make it illegal for a major meatpacking company to control more than one type of meat, impose concentration caps on beef markets, and give the Federal Trade Commission authority to order divestitures of plants and facilities.

The bill would also bar foreign-controlled meatpacking companies, including Brazil-based JBS, from operating in the United States.

Schumer framed the legislation as a direct response to rising grocery costs, citing federal data showing a 16 percent increase in beef prices over the past year.

“The pernicious stranglehold of the meatpacking monopoly has weakened our supply chains and price gouged consumers at the grocery store,” Schumer said in a statement.

“Democrats are going to do what [President] Donald Trump refuses to do: put the affordability crisis front and center, every day, all year long.”

The bill is cosponsored by Sens. Cory Booker (D-N.J.), Peter Welch (D-Vt.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Rubén Gallego (D-Ariz.), Jeff Merkley (D-Ore.), Brian Schatz (D-Hawaii), Dick Durbin (D-Ill.), Ed Markey (D-Mass.), Andy Kim (D-N.J.), Chris Murphy (D-Conn.), and Sheldon Whitehouse (D-R.I.). No Republican senators have signed on.

The Epoch Times reached out to the Senate Agriculture Committee to ask whether there is Republican support for the legislation but did not receive a response by publication time.

Currently, four companies control roughly 85 percent of the U.S. beef market, 67 percent of the pork market, and more than 60 percent of the chicken processing market, according to data cited in the legislation and by the White House in its own criticism of the industry. Four decades ago, the top four beef packers controlled about 36 percent of the market, according to the bill’s text.

The concentration of the meatpacking industry has drawn scrutiny from both parties. In November 2025, President Donald Trump directed the Department of Justice to investigate the Big Four meatpackers for potential collusion and price fixing, saying that “action must be taken immediately to protect consumers, combat illegal monopolies.”

Under the proposed legislation, the Federal Trade Commission would develop divestiture plans within 120 days.

A separate provision would require foreign-controlled meatpacking companies to divest their U.S. operations. It specifically names JBS, whose parent company paid more than $280 million in 2020 to settle Justice Department charges related to bribery of foreign government officials. The bill also calls for a study of other foreign-owned processors, including Chinese-owned Smithfield Foods.

The Small Business Administration would be authorized to provide loans and technical assistance to farmers’ cooperatives and small businesses looking to acquire divested facilities.

At a roundtable hosted by Senate Democrats last week, several farming and advocacy groups voiced support for antitrust action in the sector.

“Unpredictable trade policies and corporate consolidation are squeezing family farmers on one end and consumers on the other,” said Rob Larew, president of the National Farmers Union.

Joe Maxwell, president of the Farm Action Fund, said, “When the same handful of firms dominate beef, pork, and chicken, competition breaks down, leaving farmers with too few buyers and families paying more.”

Mike Callicrate, a rancher and member of Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America, a cattle producers’ trade association, said it is “past time to enforce anti-trust laws and break up the meat monopolies like Congress did in the 1920s.”

The meat industry pushed back sharply. The Meat Institute, a trade association representing companies that process the majority of red meat and turkey in the United States, called the bill “absurd” and said it would raise costs, not lower them.

“If the Senator is trying to make meat and poultry more affordable for consumers, this is the wrong approach,“ said Julie Anna Potts, president and CEO of the Meat Institute. ”It will have the opposite effect.”

Potts said the bill ignores market realities, noting that the U.S. cattle herd is at its smallest level in 75 years and that beef packers have recently experienced record losses of more than $350 per head. She also questioned the feasibility of forced divestitures, asking who would have the capital and expertise to buy and operate the facilities.

“The ensuing chaos and likely significant drop in meat production will upset delicate supply and demand forces, ultimately forcing retail and food service to hike consumer prices,” Potts said.

“It comes at exactly the wrong time, when food prices are already too high for many American families.”

She said the bill “incentivizes beef and pork packing to leave the U.S. for foreign countries.”

A US-sanctioned tanker carrying Iranian LPG, the Danuta I, transited the Strait of Hormuz on Friday without incident, shortly after a China-linked bulk carrier also exited the world’s most critical energy chokepoint, suggesting IRGC forces may, for now, be allowing Iranian- and Chinese-linked vessels to pass. That said, the strait remains paralyzed for broader commercial traffic, risking energy shocks across Asia that, if prolonged, could spill over into financial markets.

Bloomberg reports the very large gas carrier, sailing under the flag of Palau, transited the strait in the early hours of Friday morning local time without incident. The ship picked up cargo from within the Persian Gulf, which Bloomberg journalists said was “seen from a draft increase.”

“The Strait of Hormuz is currently too risky for legitimate shipowners to cross from a commercial standpoint as well as for safety of crew, which explains the dozens of tankers stuck waiting within the Gulf and unable to exit,” Charlie Brown, an advisor to United Against Nuclear Iran, told the financial outlet.

Brown said, “Dark fleet or sanctioned tankers may take a calculated risk to sail through, possibly after communication with Iranian forces in the area.”

Late Wednesday, the Chinese-linked bulk carrier Iron Maiden transited the narrow waterway without incident, after reports circulated that Tehran would permit Chinese vessels to transit.

Vessel traffic data through Hormuz has all but collapsed, down 90%, according to ship-tracking website MarineTraffic.

Tanker traffic through Strait of Hormuz down by 90%

Analysis of vessel activity indicates tanker transits are now around 90% lower than last week. Matt Wright, Principal Freight Analyst at Kpler, explains: “Unlike several other vessel segments where movements have largely… pic.twitter.com/JIhFoAkQKO

— MarineTraffic (@MarineTraffic) March 4, 2026

The collapse in vessel traffic through the maritime chokepoint suggests, based on commentary and data we’ve diligently compiled from top institutional desks and energy experts, that any extended disruption of the waterway is setting the stage for an energy shock in Asia. If prolonged, it could also affect other parts of the world (Europe) and morph into a financial crisis.

• “This Will Bring Down Global Economy”: Qatar’s Energy Minister Offers Dire Warning About Hormuz Chokepoint Chaos

• The Most Important Number For The Market: “25 Days”

• JPMorgan’s New Hormuz Closure Math: Just 3 Days Until Commodity Chaos

Professional subscribers can read much more about the Middle East, the Strait of Hormuz, and energy markets at our new Marketdesk.ai portal.

Authored by Steve Watson via modernity.news,

In a stunning display of hypocrisy, neocon warmonger Bill Kristol is now trashing the Trump administration’s strikes on Iran—dubbed “Epic Fury”—despite agitating for military action against the regime for the past 25 years.

Kristol has spent years pushing to thwart Iran’s nuclear ambitions, and was even still doing so in January, only to pivot into full sabotage mode now that Trump has pulled the trigger.

Whether you’re for or against this military action, or waiting to see how it all pans out, we can all agree that Kristol is the most odious TDS-infected worm of a man.

Maybe Rubio should stop inventing “imminent threats” to justify the war his administration started and get to work doing his department’s job of helping Americans in the war zone they created. https://t.co/hVFtT81cBi

— Bill Kristol (@BillKristol) March 3, 2026

Kristol’s recent outburst came in a tweet where he incredibly accused the administration of fabricating reasons for the conflict.

Responding to complaints about Americans stranded amid the chaos, Kristol wrote: “Maybe Rubio should stop inventing ‘imminent threats’ to justify the war his administration started and get to work doing his department’s job of helping Americans in the war zone they created.”

This criticism flies in the face of Kristol’s own record. Back in 2012, through his role at The Weekly Standard, Kristol declared it was time to say no to Iranian nukes. He positioned himself as a hawk on Iran, prioritizing prevention of their nuclear program above all.

Even before this as a part of the Project For A New American Century, Kristol backed regime change in Iran.

Fast forward to January 2026, and Kristol was still at it, slamming the administration’s focus on Greenland as a distraction while urging prioritization of Iran. As one observer noted in a tweet: “Bill Kristol claims the U.S. invented a reason to attack Iran. He is opposing the position that we needed to go into that country to liberate the citizens that was promoted by…Bill Kristol.”

Bill Kristol claims the U.S. invented a reason to attack Iran.
He is opposing the position that we needed to go into that country to liberate the citizens that was promoted by…Bil Kristol. pic.twitter.com/lKLayrm9u4

— Lie-Able Sources (@LieAbleSources) March 4, 2026

The backlash to Kristol’s tweet was swift and brutal, with users on X dredging up his past calls for war to highlight the hypocrisy. One reply captured the sentiment perfectly: “Bruh you were calling for war with Iran a month ago.”

Bruh you were calling for war with Iran a month ago pic.twitter.com/W3vYJ8W40f

— Sunny (@sunnyright) March 3, 2026

Bill Kristol doing the current thing while ignoring his support for it two months ago. pic.twitter.com/Jx6ruiqih5

— Jerry Grey🐊 (@Jerry__Grey) March 3, 2026

Now I know you were all just paid. It’s absolutely confirmed at this point you get a talking point and they pay you to say it. pic.twitter.com/GJlRzGJzql

— Florida Breeze (@Fl941_SRQ) March 3, 2026

pic.twitter.com/9g0WstvUSo

— Paula (@PaulaC_mj1981) March 3, 2026

Did you know you’re Bill Kristol

— jimtreacher.substack.com (@jtLOL) March 3, 2026

These responses underscore how Kristol’s flip has alienated even those who once shared his views, revealing his opposition as rooted in personal animus rather than policy.

This isn’t Kristol’s first rodeo in exposing his anti-Trump bias. He previously stated that he’d much rather see shadowy bureaucrats running things over the duly elected president, with one responder noting: “You’re saying you prefer not knowing who’s running the country just because you hate the person the American people chose as president?”

Others tied it to potential self-interest: “For you, the deep state is preferable because you are listed as the President of Defending Democracy (EIN 831567380) which is an indirect beneficiary of USAID through Rockefeller Philanthropy Advisors. You are exposed.”

That deep state preference now aligns seamlessly with his Iran flip. Kristol’s pattern is clearly to undermine at all costs, even if it means contradicting his lifelong warmongering.

Kristol’s about-face exposes the rot in establishment conservatism, where hatred for Trump trumps national security.

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