Ahead Today
G3: Germany factory orders and industrial production; Japan leading index
Asia: China CPI, Taiwan exports
Market Highlights
Nonfarm payrolls fell by 92k in February, well below market expectations for modest job gains and January’s 126k increase. The unemployment rate edged up to 4.4% from 4.3%, with job losses recorded across manufacturing, construction, and health services. That said, wage growth remains relatively resilient at 3.8%yoy. Overall, the data point to a US labour market that is losing momentum.
For now, however, signs of labour market weakening have been overshadowed by the sharp surge in oil prices. Brent crude futures have broken above the US$100/bbl mark amid escalating US‑Iran tensions. Supply disruptions are intensifying as the Strait of Hormuz is effectively shut, with vessel‑tracking data showing a halt in ship traffic through the passage. UAE, Kuwait, and Iraq have cut oil production, with Iraq alone indicating a reduction of around 3 million barrels per day. Geopolitical risks remain elevated, with President Trump calling for Iran’s unconditional surrender and Israeli airstrikes targeting key fuel storage facilities in Iran, reinforcing upside risks to global energy prices.
Regional FX
Global markets are firmly in risk‑off mode as the US‑Iran war continues to drive a further surge in energy prices and heighten broader risk aversion. Net oil‑importing economies in Asia are particularly exposed, with currencies and equity markets likely to face downward pressure. Based on net oil trade balances and dependence on Middle Eastern oil supply, Thailand, Korea, and the Philippines appear especially vulnerable to oil price shocks and potential supply disruptions. Since the onset of the Iran conflict, the KRW, THB, and PHP have already underperformed against the US dollar, and remain exposed to further terms‑of‑trade deterioration should energy prices stay elevated or rise further.