Name: Global stocks take a breather | Morning Bid
Uploaded: 2026-03-05T16:58:59.000Z
Duration: 7 min 11 s
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Today, global stock markets catch a break even as oil prices keep climbing on the Middle east crisis.

Plus, Europe worries about another war related energy shock.

And China sets its lowest GDP target since 1991.

This is Reuters Morning Bid bringing you unfiltered market news and analysis straight from the Reuters newsroom seven days a week.

Well, Mike, the war is continuing to rage.

Oil prices stay elevated, yet markets seem to be steadying a bit.

Yeah, look, I think we need to couch anything that's happening in this really kind of turbulent week within the framework that everything is being traded almost headline by headline, certainly day by day, if not hour by hour.

So it's almost like a sequencing of world markets as we go around the 24 hour period.

So yesterday about sort of mid morning European time, there was something of a rally in global stocks generally.

It hinged on this idea that Iran had made some overtures to the United States, a story that's been slightly downplayed since.

However, it was enough just to get everyone taking a pace back, taking a breather if you like.

And it saw Wall street kind of rally through yesterday's session.

That was enough in Asia today to see a bounce back in some really big losses that they'd incurred.

Korea, the obvious one, it's kind of the, the outlier had been the outlier all year, it has to be said, but

at 12%, biggest one day drop ever yesterday is, jumped back almost 10% today.

I think we can, we can, we can say that for sure.

And it seems to me that you have markets making these relatively big moves despite the fact that, as you say, there's not actually that much news to support it.

And that really suggests that investors are essentially grasping at straws at this moment.

Yeah, and I think there's two points to kind of make on that.

I think one is that as we said in the intro, the crude oil price is continuing to climb.

So we're seeing US crude set high for the week, its highest level since last June.

It's gotta be something that's worrying there for Washington.

I would say that the plans that President Trump laid out during the week to kind of calm the energy markets in particular, the idea of.

Those that didn't seem to have any particular calming effect.

And as we see from all the headlines, whatever about the actual conflict and the missile strikes across the region, we're seeing oil production coming grinding to a halt pretty much in all the centers there.

I mean, I think the concern is that this can really only go on so long, until all of the storage in the region starts filling up and then you really do have to start significantly curtailing production.

You've obviously seen production already curtailed in terms of gas production in Qatar.

You know, a very big producer clearly now just halting any further, can't get the oil out like everybody else.

So we are in that funny situation where markets are looking to kind of catch.

To catch a break and the energy markets are perh.

Speaking of energy markets, one of the regions that looks especially vulnerable.

We've spoken about Asia, but also Europe.

I think when people look at what happened after the Ukraine crisis and energy prices spiked and what that meant in terms of inflation, in terms of rates, people look at where Europe is now and say, oh, are they going to be experiencing the same thing?

But you wrote a piece today suggesting that that might not actually be the case.

I think Europe had a big intake of breath when this happened because it all felt very like it did in 2022.

The European gas prices, when the Russian invasion actively cut off all those pipelines back in that day, gas prices trebled in the six months after the Ukraine invasion.

They're up very sharply this week, partly because of the outage in Qatar, but

it is about 50% as we stand at the moment.

So it's a burn and it's going to push up energy price for sure, but

So this is why the duration of this conflict is so important.

And I think going back to both why stock markets maybe generally, as well as European markets in particular, are not quite as alarmed, maybe as you might think, the spot cruise price would suggest is looking at the futures curve.

So the futures in the energy markets are talking about some normalization of these prices within the next six to 12 months.

Now, that's still a long time and that will have an economic effect.

But in Europe's case, two things are very interesting that people are pointing out.

Is actually running below the European Central Bank's target and gives the ECB a bit more room.

And you know, the worry coming into this was the fact that Europe may actually be in a position where it's undershooting that target on a protracted basis.

So it takes the possibility of the ECB cutting again off the table completely.

Does it force them into a situation where they need to start hiking again?

It's too early to tell on that one, but certainly not at this point.

And also the second thing that they would be watching very clearly is whether this affects long term inflation expectations.

You know, when we're thinking about Europe and their inflation expectations, China really factors into that.

And one of the things that we got today were new GDP targets out of China.

And there while they might look high for other developed markets for China, they're actually somewhat on the low end.

Yeah, well, it's a low since 1991 as the headlines would tell us, is not so four and a half to 5%.

Yeah, 4.5 to 5% is there is their range now rather than a point target?

the signaling is interesting and it shows some of the issues, structural issues that China faces and it is relying or has relied on trade, the biggest trade surplus ever last year, 1.2 trillion to generate that headline GDP growth.

And obviously because of the issues they've had with the United States then so much of that needs to be rerouted to other places.

It's going to other places in Asia, but also a lot of those exports are going to Europe.

For today's recommended read, check out Clyde Russell's column on the huge surge in jet fuel prices.

And for more on any of today's stories, head to Reuters.com or the Reuters app.

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