Daily Market Outlook, March 18, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Global stock markets extended their rally into a third consecutive day as investors shrugged off immediate geopolitical tensions, focusing instead on potential signs of market stability. This optimism came despite escalating turmoil in Iran, which continued to disrupt energy markets and stoke concerns about rising inflation. Meanwhile, oil prices saw a sharp uptick due to supply uncertainties. The MSCI All Country World Index, a comprehensive gauge of global equities, edged up by 0.4%, marking its longest stretch of gains in nearly a month. Asian markets led the charge with a 2% surge, driven by strong performances from memory-chip powerhouses like Samsung, which are perceived as less exposed to the ongoing Middle East crisis. Futures tied to US and European equity indices also climbed by 0.5%, suggesting that the wave of cautious optimism could ripple across other regions. However, this positive momentum unfolded against the backdrop of intensifying conflict in the Middle East, with no clear resolution in sight. The situation in the region grew more volatile as both the US and Israel ramped up military operations. Israel claimed responsibility for a midnight strike that reportedly killed Iran's security chief, Ali Larijani. Simultaneously, President Donald Trump pledged to expand attacks on Kharg Island, a critical hub for Iran's oil exports, while Gulf nations continued to grapple with drone assaults allegedly launched by Iran. In other financial news, the Dollar Index slipped 0.1% as investors awaited the Federal Reserve's next move. US Treasury yields dipped slightly, with the benchmark 10-year yield easing by 2 basis points to 4.18%. Meanwhile, gold prices softened marginally, falling 0.1% to trade just below $5,000 per ounce.

The RBA kicked off a busy week for policy meetings with a 25bps rate hike, raising rates to 4.1%. This move reflects reaccelerating inflation and mounting capacity pressures, compounded by rising energy costs linked to the Iran conflict. Despite tighter financial conditions from earlier hikes, credit flow data suggests prior easing is still influencing the economy. Governor Bullock emphasized pre-existing factors like a tighter labor market and higher fuel costs in the decision. While the committee voted 5-4, all members agreed domestic conditions warranted further tightening, though some preferred waiting for more data amid uncertainties. With inflation risks and a strong domestic economy, markets anticipate further hikes, possibly in May, with 12bps priced in—supportive of the AUD.

Recent events will significantly influence the Fed’s economic outlook, despite uncertainties around the war’s duration and outcomes. While it’s premature to raise the Fed Funds rate (holding at 3.50-3.75%), an upward shift in the dot plot is likely. Some FOMC members previously advocated removing language on potential rate cuts, citing persistent inflation concerns, which recent data has reinforced. The San Francisco Fed’s analysis of PCE data highlights supply-side pressures and accelerating non-health acyclical components, predating the recent oil and gasoline price spikes. On the demand side, economic softness and a troubling employment report add to concerns, with rising energy costs exacerbating the situation. Although fears of second-round effects persist, the economic projections may reflect stagflation, with higher inflation and weaker growth and employment. Powell will likely adopt a balanced tone in the press conference, addressing trade-offs and potential impacts of a shorter conflict.

Overnight Headlines

• BoC Seen On Hold Amid Geopolitical Risk And Tepid Growth

• Fed Faces Energy-Driven Inflation; As Markets Reprice Rate Path

• Traders Dial Back Bets Against Fed Cuts As Growth Worries Build

• Powell’s Second-To-Last Meeting With An Increasingly Divided Fed

• US To Ease Venezuela Sanctions To Unlock More Oil Amid Iran War

• Iran Confirms Death Of Security Chief Larijani, Tasnim Reports

• Brent Oil Seen Staying Near $100 Through Mid-2026

• Russia Sharing Satellite Imagery And Drone Technology With Iran

• OpenAI Gears Up For Potential IPO By Year-End

• Nvidia Restarting Production Of H200 Chips For China Sales

• Microsoft Weighs Legal Action Over $50B Amazon–OpenAI Cloud Deal

• Alimentation Couche-Tard Records Higher Q3 Profit, Revenue

• Lululemon Reports Weak Guidance Amid Proxy Battle, Tariff Pressures

• SEC, CFTC Move To Define Which Digital Assets Are Securities

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• EUR/USD: 1.1375 – €565 million | 1.1400 – €832 million | 1.1450 – €1.2 billion | 1.1500 – €827 million | 1.1575 – €784 million | 1.1600 – €772 million | 1.1640 – €540 million | 1.1650 – €1.7 billion | 1.1700 – €526 million

• USD/JPY: 157.00 – $959 million | 157.10 – $572 million | 157.50 – $763 million | 158.60 – $818 million | 159.00 – $1.0 billion | 159.50 – $1.1 billion | 160.00 – $513 million | 160.50 – $885 million

• GBP/USD: 1.3200 – £580 million | 1.3300 – £2.7 billion | 1.3400 – £663 million

• USD/CAD: 1.3675 – $539 million

• AUD/USD: 0.6950 – A$1.2 billion | 0.7050 – A$818 million | 0.7100 – A$852 million | 0.7150 – A$561 million | 0.7200 – A$548 million

• EUR/GBP: 0.8600 – €535 million

CFTC Positions as of March 13, 2026: 

• Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 173,130 contracts, bringing it down to 1,917,664 contracts. Similarly, the net short position in CBOT US 10-year Treasury futures has been decreased by 119,624 contracts, now totaling 534,883. The net short position for CBOT US 2-year Treasury futures has seen a minor reduction of 305 contracts, reaching 1,338,236. In contrast, speculators have increased their net short position in CBOT US UltraBond Treasury futures by 34,408 contracts to a total of 290,102. There has also been a rise in the net long position for CBOT US Treasury bonds futures by 21,772 contracts, bringing it to 42,037. 

• The Swiss franc has a net short position of -41,092 contracts, while the British pound shows a net short position of -84,197 contracts. On the other hand, the Euro has a net long position of 105,144 contracts, and the Japanese yen records a net short position of -41,387 contracts.The net long position for Bitcoin stands at 1,302 contracts

Technical & Trade Views

SP500

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 6800 Target 6920

• Below 6700 Target 6500

EURUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.1675 Target 1.1730

• Below 1.15 Target 1.1350

GBPUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.3450 Target 1.3550

• Below 1.3400 Target 1.3150

USDJPY 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 159 Target 161.50

• Below 155 Target 152

XAUUSD

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 5150 Target 5325

• Below 5200 Target 4900

BTCUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 79.5k Target 81.5k

• Below 78k Target 53k