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The daily barrage of war-related headlines produced a noteworthy one from a market perspective. The Qatari energy minister Saad al-Kaabi in the FT warned that all Gulf states will soon be forced to shut down production and that a return to normal could take weeks to months even if the war ended immediately. “Everybody that has not called for force majeure we expect will do so in the next few days that this continues”, Kaabi said, adding that if the war continues for weeks it will bring down economies with higher energy prices, shortages of some (petrochemical, fertilizer) products and a chain reaction of factories that cannot supply. QatarEnergy, the world’s biggest LNG company (20% of world production), declared force majeure earlier this week, triggering a bidding contest for whatever output that remains. Kaabi predicts crude prices to rise to $150 a barrel in two to three weeks if the Strait of Hormuz remains shut. Gas prices would rise to around €120/MWh. His comments spark another energy price burst with Brent closing in on the $90/b barrier (a weekly +23%) and Dutch TTF gas jumping to €52 (+62%). That’s pushing up ECB rate hike bets even further with a 25 bps move more than discounted by end-2026. 3M Euribor futures underwent a colossal 40 bps weekly repricing: money markets just one week ago mulled additional rate cuts. Front-end European yields today surge 8 bps, bringing the weekly tally to a stunning +33 bps. Gains for long-term maturities vary between +1.5 (30-yr) to +21 bps (10-yr). European stocks, fearing the economic impact from a new energy crisis after not even having fully recovered from the 2022 one, slip around 1%. The euro is under pressure with EUR/USD entering the payrolls release near the lowest sub 1.16 levels since end-November.

The February labour market report greatly missed the +55k expectations with employment dropping 92k and the two previous months revised downwardly by 69k. A strike in the health care sector weighed on employment but does little to alter the overall view of what is a soft report. The unemployment rate climbed to 4.4% from 4.3% even as the participation rate eased from 62.1% to 62%. Wages grew at a slightly faster-than-expected clip of 0.4% m/m and 3.8% y/y, remaining (well) above the pre-pandemic average. The payrolls cast doubt on the state of the labour market, which an increasing amount of Fed officials, including the dove Bowman just yesterday, said was showing signs of stabilizing after weakening. US yields swapped earlier 2-3 bps gains for similar-sized losses but simply cannot ignore the sharp energy price rise. With “Brent hits $90” headlines dropping as we write, Treasury yields get back positive, further fueled by President Trump stripping the market of any hopes for a short-term deal with Iran in a Truth Social post. Instead he’s demanding unconditional surrender. US yields rise up to 3 bps, German rates extend daily gains to 11 (!) bps. The dollar’s payrolls kneejerk reaction lower was muted and temporary. European stocks double earlier declines to 2% and Wall Street opens around 1.5% lower.

News & Views

Switzerland plans a temporary VAT increase of 0.8 ppts for ten years starting in 2028 to address a significantly worsened security environment. The measure is designed to raise about CHF 31bn, which will fund stronger military and civilian protection against hybrid threats, cyberattacks, long range strikes, and infrastructure vulnerabilities. All additional revenue will flow into a new defense procurement fund, which can temporarily take on up to CHF 6bn in debt to accelerate key purchases, with all debt to be repaid by the end of the ten year period. The Federal Council aims for a required national vote in summer 2027, enabling the VAT increase to take effect on 1 January 2028. The Swiss franc holds near strongest levels on record against the euro in the risk-off market climate (EUR/CHF 0.9050).

The food price index of the Food and Agriculture Organization of the United Nations in February posted the first rise in five months. The overall index rose 0.9% compared to January. Still, the overall index was 1.3% lower compared the same month last year. Increases in the sub-indices of cereals, meats and vegetable oils more than offset declines in the indices of dairy and sugar. Even so, in a broader perspective, the overall price index still was 1% lower Y/Y and 21.8 % Y/Y below the March 2022 peak. Focusing on cereal prices, the index rose 1.1% but was also still 3.5% below the year-ago level. Amongst others, wheat prices rose due to heightened seasonal factors in producer regions in Europe and the US. Logistical disruptions in the Russian Federation and continuing tensions in the Black Sea region also contributed to the increase. Vegetable oil price accelerated 3.3% M/M, reaching the highest level since June 2022, with prices for palm oil, soy and rapeseed all adding to a higher level of this sub-index.

Daily Pivots: (S1) 156.73; (P) 157.29; (R1) 158.12; More...

Intraday bias in USD/JPY is back on the upside with breach of 157.96 temporary top. Rise from 152.25 is resuming for retesting 159.44 high next. On the downside, below 156.44 support will turn bias neutral again first. Overall, price actions from 159.44 are viewed as a near term consolidation pattern. Outlook will remain bullish as long as 38.2% retracement of 139.87 to 159.44 at 151.96 holds.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.16) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Daily Pivots: (S1) 0.7781; (P) 0.7810; (R1) 0.7838; More….

USD/CHF is still extending consolidations below 0.7877 and intraday bias stays neutral. Further rise is expected as long as 0.7671 support holds. Rebound from 0.7603 is seen as correcting the whole fall from 0.9022. Above 0.76877 will target 0.8039 resistance next.

In the bigger picture, a medium term bottom could be in place at 0.7603 on bullish convergence condition in D MACD, Firm break of 0.8039 resistance will argue that it's at least correcting the down trend from 0.9002. Stronger rebound would then be seen to 38.2% retracement of 0.9200 to 0.7603 at 0.8213.

Daily Pivots: (S1) 1.3308; (P) 1.3347; (R1) 1.3397; More...

GBP/USD is still bounded in consolidations in tight range above 1.3252 and intraday bias remains neutral. Fall from 1.3867 should at least be correcting the rise from 1.2009. Below 1.3252 will target 38.2% retracement of 1.2099 to 1.3867 at 1.3192. Sustained break there will pave the way to 1.3008 support. For now, risk will stay on the downside as long as 1.3574 resistance holds, in case of recovery.

In the bigger picture, as long as 1.3008 support holds, rise from 1.3051 (2022 low) should still be in progress for 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. However, firm break of 1.3008 will raise the chance of medium term bearish reversal and target 1.2099 support next.

Nonfarm payrolls declined by 92k in February, well below the consensus forecast calling for a gain of 55k. Revisions to the two prior months subtracted a total of 69k from the previously reported figures, with the bulk of the revisions concentrated in December.

• Smoothing through the volatility, nonfarm payrolls have averaged just 6k per-month over the last three months, slightly below the prior twelve-month average of 24k.

Private payrolls fell by 86k, following a gain of 146k in January, with the bulk of the pullback coming from health care & social assistance (-18.6k after adding 116.4k in January). However, part of the reversal in health care (~37k) reflected a strike among offices of physicians. Job losses were also seen in weather-sensitive sectors like construction (-11k) and leisure & hospitality (-27k), though manufacturing (-12k), information (-11k) and professional & business services (-5k) also saw modest declines.

• Federal job cuts appear to be slowing, as the sector shed just 10k jobs last month, fewer than the 18k averaged over the prior three months.

In the household survey, an increase in the number of unemployed (+203k) offset stagnant growth in the labor force – pushing the unemployment rate up to 4.4%.

The household survey also included new population controls to better align with the Census Bureau estimates. The revisions were implemented as of January 2026, but the historical data prior to 2026 were left unchanged. Civilian population was revised lower by just 306k. But because the adjustment proportionally shifted the labor force, unemployment and employment levels, January's unemployment rate was kept unchanged at 4.3%.

Average hourly earnings (AHE) rose 0.4% month-on-month (m/m), matching January's gain. On a twelve-month basis, AHE ticked up to 3.8%.

Key Implications

A big miss on employment for February, with private payrolls recording its sharpest decline since December 2020. However, some of the pullback can be attributed to health care services, where job growth was impacted by an ongoing strike and comes on the heels of an unusually strong gain in January. Moreover, hiring activity was also notably weak in weather sensitive sectors, like construction and leisure & hospitality – suggesting last month's poor weather conditions may have helped to restrain hiring. And while the unemployment rate ticked higher, the broader U-6 measure, which includes individuals working part-time for economic reasons, fell to a seven-month low of 7.9%.

Bigger picture, this morning's release doesn't fundamentally alter our view on the labor market. From a policy perspective, the bigger threat to the Fed's dual mandate has shifted back to price stability. Core measures of inflation remain stubbornly elevated with this week's escalation of the Iran conflict adding further upside risk amid the spike in oil prices. Fed futures aren't fully pricing in the next rate cut until September and there are doubts about whether there will be a second this year – with a total of 44 basis points of easing priced by year-end.

Daily Pivots: (S1) 1.1564; (P) 1.1605; (R1) 1.1652; More….

EUR/USD weakened notably today but stays above 1.1529 temporary low. Intraday bias stays neutral first. On the downside, below 1.1529 will resume the fall from 1.2081. Sustained break of 1.1576 structural support would confirm rejection by 1.2 key psychological level. That should also confirm medium term topping on bearish divergence condition in D MACD. Further decline should be seen to 38.2% retracement of 1.0176 to 1.2081 at 1.1353 next. In any case, risk will stay on the downside as long as 1.1740 support turned resistance holds.

In the bigger picture, as long as 55 W EMA (now at 1.1494) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Markets appeared largely unfazed by the shockingly weak US non-farm payroll report, as attention is already occupied by the explosive surge in oil prices. WTI crude has broken decisively above the 85 mark and continues to climb as the US session begins, turning energy markets into the dominant driver of global sentiment.

The weak payrolls report has shifted Fed expectations. The probability of the Fed holding rates at the current 3.50–3.75% range has fallen to around 50%, compared with roughly 67% just a day earlier. In effect, a 25-basis-point rate cut in the first half of the year has marginally returned to the table. However, the outlook remains highly dependent on how inflation evolves amid surging energy prices.

Surprisingly, Dollar has not weakened in response to the poor jobs report. Instead, the greenback is drawing support from risk aversion as equity markets come under pressure. DOW futures have fallen more than -1.2%, signaling a sharply weaker open for US equities and reinforcing safe-haven demand for the Dollar.

The real shock to markets is coming from the oil complex. WTI’s surge above 85 signals that markets are transitioning from geopolitical “risk-off” concerns to a more severe phase of structural panic. The effective blockade of the Strait of Hormuz provided the initial spark, but the latest comments from Qatar Energy Minister Saad al-Kaabi have dramatically intensified fears of a prolonged supply crisis.

Kaabi warned that Gulf energy exporters may soon declare force majeure, a move that would legally free them from their contractual delivery obligations. Such a scenario would mean that the world is no longer facing a temporary logistical disruption but rather a potential evaporation of Middle Eastern supply.

The minister’s remarks have also introduced a new psychological anchor for energy markets. By openly referencing the possibility of oil reaching 150 per barrel, Kaabi has effectively reset the upper bound of market expectations. Traders are increasingly beginning to price in the “chain reaction” he described.

That chain reaction could involve shortages of both crude oil and LNG feedstocks, forcing industrial shutdowns across Europe and Asia if supply disruptions persist. In that context, the recent surge above 85 is no longer seen as an extreme price level but rather an early stage of a potentially much larger move.

Even a rapid de-escalation in the Middle East may not immediately stabilize energy markets. With tanker traffic halted through the Strait of Hormuz, restoring supply chains could take weeks or even months after hostilities end.

In the currency markets, for the week so far, Loonie is the strongest performer, benefiting directly from rising oil prices, while the US Dollar holds second place as risk aversion lifts demand for safe assets. Sterling follows as the third-best performer. At the other end of the spectrum, Kiwi is the weakest currency this week, followed by Euro and Aussie. Swiss Franc are trading near the middle of the pack as markets grapple with the increasingly dominant energy shock narrative.

In Europe, at the time of writing, FTSE is down -1.28%. DAX is down -1.56%. CAC is down -1.39%. UK 10-year yield is up 0.174 at 4.655. Germany 10-year yield is up 0.029 at 2.874. Earlier in Asia, Nikkei rose 0.62%. Hong Kong HSI rose 1.72%. China Shanghai SSE rose 0.38%. Singapore Strait Times rose 0.03%. Japan 10-year JGB yield rose 0.009 to 2.166.

NFP misses big with -92k jobs, but wages hold up

US labor market data delivered a sharp downside surprise in February as non-farm payroll employment contracted by -92k, far below expectations for a 65k increase. The report marks a significant setback for the labor market outlook and contrasts with the relatively resilient signals from earlier indicators such as ADP and ISM employment data.

The details of the report were also weaker than expected. The unemployment rate rose from 4.3% to 4.4%, while the labor force participation rate slipped by -0.1 percentage point to 62.0%.

In addition, payroll revisions were notably negative, with December’s figure revised down by 65k to -17k and January trimmed slightly to 126k, further highlighting the softening momentum in hiring.

Despite the weakness in employment growth, wage pressures remained firm. Average hourly earnings rose by 0.4% mom, above expectations of 0.3%, while annual wage growth held at a solid 3.8%. The average workweek was unchanged at 34.3 hours.

Fed’s Waller downplays oil surge as temporary inflation shock

Fed Governor Christopher Waller signaled that the recent surge in oil prices tied to the Middle East conflict may not significantly alter the longer-term inflation outlook. Speaking to Bloomberg Television, Waller acknowledged that Americans will likely see a noticeable jump in gasoline prices in the near term, warning that drivers could be “a little shocked” when they see prices at the pump.

However, Waller emphasized that if the spike in energy prices unwinds within a few weeks or even a couple of months, "it's not going ​to be a big factor down the road."

From a policy perspective, Waller characterized the current oil shock as closer to a “one-off event” rather than a sustained inflation driver. He reiterated that the Fed focuses primarily on core inflation—which excludes volatile components such as energy and food—precisely because commodity prices can fluctuate sharply in response to temporary shocks without altering the underlying inflation trend.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1564; (P) 1.1605; (R1) 1.1652; More….

EUR/USD weakened notably today but stays above 1.1529 temporary low. Intraday bias stays neutral first. On the downside, below 1.1529 will resume the fall from 1.2081. Sustained break of 1.1576 structural support would confirm rejection by 1.2 key psychological level. That should also confirm medium term topping on bearish divergence condition in D MACD. Further decline should be seen to 38.2% retracement of 1.0176 to 1.2081 at 1.1353 next. In any case, risk will stay on the downside as long as 1.1740 support turned resistance holds.

In the bigger picture, as long as 55 W EMA (now at 1.1494) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Fed Governor Christopher Waller signaled that the recent surge in oil prices tied to the Middle East conflict may not significantly alter the longer-term inflation outlook. Speaking to Bloomberg Television, Waller acknowledged that Americans will likely see a noticeable jump in gasoline prices in the near term, warning that drivers could be “a little shocked” when they see prices at the pump.

However, Waller emphasized that if the spike in energy prices unwinds within a few weeks or even a couple of months, "it's not going ​to be a big factor down the road."

From a policy perspective, Waller characterized the current oil shock as closer to a “one-off event” rather than a sustained inflation driver. He reiterated that the Fed focuses primarily on core inflation—which excludes volatile components such as energy and food—precisely because commodity prices can fluctuate sharply in response to temporary shocks without altering the underlying inflation trend.

US labor market data delivered a sharp downside surprise in February as non-farm payroll employment contracted by -92k, far below expectations for a 65k increase. The report marks a significant setback for the labor market outlook and contrasts with the relatively resilient signals from earlier indicators such as ADP and ISM employment data.

The details of the report were also weaker than expected. The unemployment rate rose from 4.3% to 4.4%, while the labor force participation rate slipped by -0.1 percentage point to 62.0%.

In addition, payroll revisions were notably negative, with December’s figure revised down by 65k to -17k and January trimmed slightly to 126k, further highlighting the softening momentum in hiring.

Despite the weakness in employment growth, wage pressures remained firm. Average hourly earnings rose by 0.4% mom, above expectations of 0.3%, while annual wage growth held at a solid 3.8%. The average workweek was unchanged at 34.3 hours.

Full US non-farm payroll release here.

WTI Oil price jumped above $86 per barrel on Friday, extending steep ascend into fifth straight day, on track for the biggest and steepest weekly gain since early 2022, when the war in Ukraine started.

Growing fears of stronger supply disruption due to closure of Hormuz strait and signals that war may extend until September, or more worrying latest comment from President Trump that there are no time limits for the duration of the war, are expected to continue to inflate oil prices.

On the other hand, Russian oil supply remains stable (US lifted some sanction for buying Russian oil) that may partially offset negative impact.

The latest market action and deteriorating conditions suggest that oil price can hit $100 per barrel, which is still away from spikes in 2022 ($130) and 2008 ($147).

Friday’s strong acceleration surged through round-figure $80 barrier and broke technical resistance at $85.53 (Fibo 76.4% of $95.00/$54.87, 2023/2025 downtrend), violation of which to open way towards Apr 2024 double-top ($87.61) and unmask $90 barrier.

Although the price action remains well supported by favorable fundamentals (key driver), we should expect some price adjustments as daily and weekly studies are strongly overbought and some traders are likely to collect profit profits at the end of the week.

However, dips are likely to be limited to keep larger bulls intact and provide better levels to re-enter strong bullish market.

Broken barriers at $80 (round-figure) and nearby $79.67 (Fibo 61.8% of $95.00/$54.87) reverted to supports which should ideally contain dips.

Res: 86.67; 87.61; 89.38; 90.00.
Sup: 84.90; 83.50; 81.80; 80.00.