This outlook contains information correct as at 1400hr on 03 Mar 2026
Geopolitical Shock and Market Volatility
President Trump threw a spanner in the works just as the world is beginning to settle into a new geopolitical reality. The weekend and continuing strikes by the US and Israel against Iran and its leadership, and strategic nuclear-related infrastructure, have caused a retreat in global risk sentiment.
Renewed and spreading military conflict in the Middle East, with many Arab countries, has increased market volatility. The immediate knee-jerk impact may be short-lived as historically; geopolitical driven selloffs have been temporary. For disciplined investors, this often creates tactical buying opportunities. Near-term indiscriminate pullbacks offer a selective opportunity to add high-quality assets, e.g., blue chips. However, we will have to wait and observe the longer-lasting effects of this on the Middle East equation and the World. Therefore, uncertainties for 2026 are very likely to continue and dominate the direction of global markets.
The US economy, already suffering from high prices, a difficult job market and general voter disenchantment, might get another shock from the Iran war. The biggest domestic effect on Americans will be higher gasoline prices.
US Policy, Growth and Private Credit Risks
The US Supreme Court has upheld a lower court's decision that Trump's use of a 1977 emergency law exceeded his authority. Trump immediately responded by raising a temporary tariff from 10% to 15% on US imports from all countries, the maximum level allowed under an untested law known as Section 122. This allows tariffs up to 15% but requires congressional approval to extend them after 150 days.
Thousands of companies around the world have filed lawsuits against Trump's sweeping tariffs, and it may now take years of litigation to determine whether they will be refunded.
Federal Reserve policymakers continue to express concerns about still-elevated inflation. US real GDP grew at a 1.4% YoY in Q4, below consensus, with core PCE increasing to 3.0% from 2.8%. US GDP growth in 2026 is expected to be 1.7%.
JPMorgan Chief Executive Officer Jamie Dimon warned, “I probably shouldn’t say this, but when you see one cockroach, there are probably more.” He was talking about the private credit market where cracks have appeared, first in the US and now in the UK. Barclays and Atlas Partners, the structured credit arm of Apollo Global Management, are among the firms that helped arrange more than USD2.7 billion of loans to a UK mortgage finance company. Market Financial Solutions collapsed into a UK form of insolvency, with the judge citing accusations of fraud and double pledging of assets.
China, Oil and Market Moves
China has signalled it will maintain a “more proactive fiscal policy” and a “moderately loose monetary policy” in 2026, implying continuity with the 2025 policy stance rather than a significant ramp-up in broad-based stimulus. Policymakers appear focused on targeted support measures. In the next few days, President Xi Jinping and his officials will unveil the 15th Five-Year Plan to spur a “significant increase” in consumption by 2030.
There may be concerns about rises in oil prices. However, on Sunday, 1 March, at a scheduled meeting, OPEC+ has already signalled willingness to offset disruptions by raising oil output. Iran produces roughly 3.3 million barrels per day, far below Saudi Arabia’s 10 million, limiting its standalone impact on supply. According to Bloomberg, the greater systemic risk is posed by shipments through the Strait of Hormuz, which handles ~20% of global seaborne oil trade. If shipping flows remain intact, the global oil shock should be transient.
Overnight, US 10-Year Treasuries closed up 0.01% at 4.04% (3 Feb 4.27%), Australian 10-Year Govt Bonds closed up 0.12% at 4.75% (3 Feb 4.83%), and Euro 10-Year Bonds closed up 0.07% at 2.71% (3 Feb 2.87%).
Over the last 1.5 months, the USD has staged a rebound against the major currencies, and even the JPY has struggled against the USD. The USD Index DXY spiked to 98.75 on Monday, 2 Mar, from last Friday’s close at 97.60 after the US and Israel struck Iran. At the time of writing, DXY is near its high at 98.48.
Sources: Bloomberg, MSNBC, Reuters, Morningstar, Business Times, 03 Mar 2026
The RBA raised its OCR by 0.25% in February to 3.85%. The first inflation reading for 2026 remained steady at 3.8%, but still well above the target range of 2% - 3%. Unemployment remains low, and the RBA is widely anticipated to lift the OCR again at its next meeting on 17 March.
Instead of consolidating, AUDUSD’s rally pushed above the Resistance Zone at 0.6900 – 0.7000, then ended at the 0.7150 area. We expect the rally to exhaust at this level, then pull back to consolidate around the 0.6900-0.7000 area before a drop to around 0.6750 in the coming weeks.
EURUSD
The outlook for EURUSD remains negative due to the Eurozone’s ongoing problems.
EURUSD has broken back below the 1.1820 Resistance and is testing the 1.1700 area. In the next few weeks, EURUSD is likely to head lower towards 50% Fibonacci Support / Resistance area at 1.1490.
Image Source: Bloomberg 03 Mar 2026
GBPUSD
Although some investors consider the UK’s host of unresolved economic, political, and social issues undervalued, they should remain a drag on GBPUSD.
As expected, GBPUSD dropped back below 1.3650 and is now testing the 1.3400 Support.
In the next few weeks, we’re likely to see GBPUSD drop into the 1.3200 - 1.3400 Support Zone, followed by consolidative trading in the Zone.
Image Source: Bloomberg 03 Mar 2026
USDJPY
The JPY remains soft as Prime Minister Sanae Takaichi has expressed reservations about additional interest rate hikes during her meeting with BoJ Governor Ueda last week. This came after Ueda said the Central Bank will continue raising interest rates if Japan makes progress toward achieving its economic and price projections.
USDJPY remains in the Uptrend Channel and has reversed upward. We expect USDJPY to continue rising toward another challenge at 160.00.
Image Source: Bloomberg 03 Mar 2026
USDSGD
USDSGD is retracing earlier losses seen after US tariff headlines, with softer risk appetite and reduced expectations of a tightening by the Monetary Authority of Singapore (MAS) in April weighing on the Singapore Dollar. Headline CPI matched forecasts, but a surprise dip in core inflation has reinforced the view that MAS should hold policy steady in April and monitor subsequent inflation data. But upside for USDSGD may be limited by SGD’s regional safe-haven status. Due to the spreading Iran war, Singapore may also see an inflow of money from the Middle East.
The 1.2600 Support held well, and USDSGD has reversed upwards. There will likely be a period of consolidation between 1.2600 and 1.2800 before USDSGD moves down to test the Support Zone at 1.2330-1.2460.
Image Source: Bloomberg 03 Mar 2026
AUDSGD
Instead of consolidating, AUDSGD broke above the Resistance at 0.8930 and is now challenging the Round Figure Resistance at 0.9000. Momentum appears strong, and the rally might head up to challenge the next Resistance at 0.9100 before exhausting. In the longer term, we could see AUDSGD move lower to around 0.8800.
Image Source: Bloomberg 03 Mar 2026
XAUUSD
One noticeable thing, there is no big spike up after the US and Israel struck Iran. Gold’s safe-haven status appears to be muted. It could be that the Gold market is very overbought. When almost everyone has bought, who else is left to buy?
There was no consolidation, and Gold continues to move upward, supported by the 50-Day Moving average. However, the technical picture is not so bullish. We may now be in an A-B-C pullback with Wave A complete and Wave B in progress and near completion. The next wave, C, may bring the price down to first test the Moving Average Support around USD4,800, then drop to stronger Support at USD4,500.
Image Source: Bloomberg 03 Mar 2026
Note: In the Candlesticks Chart, Green bars mean the Close is higher than the Open price, and Brown bars mean the Close is lower than the Open price