Global markets were rocked by the ongoing conflict in Iran, which entered its second week with no signs of abating. This led to a sell-off in APAC stocks, with equity futures in the US extending their post-Non-Farm Payrolls (NFP) declines. Oil prices surged by over 30% to just shy of $120 per barrel as producers were forced to cut output due to the conflict. However, crude futures pulled back after reports emerged that the G7 is set to discuss a joint release of emergency oil reserves in an emergency meeting on Monday.

European equity futures indicated a weak start to the day, with the Euro Stoxx 50 futures down 2.1% after closing with losses of 1.1% on Friday. The continued rise in energy prices weighed on broader sentiment, with US equity futures following suit. The DXY currency index was bid on haven flows, while the EUR looked to the G7 ministers meeting on energy for relief. Global bond yields also climbed as energy benchmarks soared, sparking a hawkish move in central bank pricing. Precious metals were weighed down by dollar strength.

Looking ahead, highlights include US NY Fed SCE, Australian Westpac Consumer Confidence (Mar), and Japanese GDP Final (Q4). Speakers include ECB’s Elderson & Cipollone. The US clocks moved forward an hour over the weekend to Daylight Saving Time, with the London-NY time difference at 4 hours.

The ongoing conflict in Iran has caused significant disruptions in global markets, leading to a sharp increase in energy prices and a sell-off in risk assets. The G7 meeting on emergency oil reserves is expected to be a key focus for investors, as the world’s major economies seek to address the supply shock caused by the conflict. Central banks are also likely to take a more hawkish stance in light of the rising energy prices and bond yields, which could have implications for interest rates and monetary policy going forward.