Oil prices play an important role

Since the start of the US-Israeli war against Iran on February 27, the price of Brent crude oil has risen from around USD 73 per barrel to around USD 100 per barrel. Although Western countries have released parts of their strategic oil reserves, oil prices have continued to rise. The USA recently damaged Iran's oil infrastructure on the island of Kharg. about 90 percent of Iran's crude oil exports pass through Kharg, which is crucial for both Tehran's economy and the global oil market. However, this increases the likelihood that Iran will retaliate by attacking oil production facilities in Saudi Arabia and other smaller Gulf states.

On Saturday, March 14. On Saturday, March 14, Trump wrote on Truth Social that countries affected by Iran's actions in the Strait of Hormuz would send warships to the area to work with the United States to keep the strait "open and secure" He named China, France, Japan, South Korea and the UK as countries he hopes will contribute. However, the UK and Germany have already rejected Trump's offer, while Japan and South Korea's response can at best be described as a wait-and-see attitude.

If the war continues, there will be further long-term consequences. One of these consequences would be a rise in the price of grains such as wheat. As transportation and food production are highly dependent on fuel, higher oil prices will directly lead to higher production costs in agriculture and more expensive transportation.

Iran has effectively blocked the Strait of Hormuz, an important shipping route for global trade. This causes problems for shipping companies and leads to delays and increased transportation costs. Between a third and a half of all fertilizer shipments worldwide are routed through the Strait of Hormuz. Fertilizer is one of the most important goods for agriculture and currently it is almost impossible for cargo ships to pass through the strait. We expect this to affect food production in most countries within three months and prices in the stores will rise soon after.Global grain production has already been under pressure since Russia's invasion of Ukraine in 2022. The conflict has disrupted Ukraine's grain production and blocked ports on the Black Sea. According to the Food and Agriculture Organization of the United Nations (FAO), the five largest wheat producers in 2024 will be China, India, Russia, the United States and Canada. By then, Ukraine had fallen back to ninth place. As the five-year weekly chart below shows, the price of Chicago Soft Wheat Futures was more than twice as high as it is today when the war between Russia and Ukraine began in the first half of 2022.

The US stock markets continued to fall on Friday, March 13. The S&P 500® lost 1.6% over the course of last week. On Friday, March 13, CNN's "Fear & Greed Index" fell below 25, the first time the index has reached "Extreme Fear" since November 2025. Over the past five years, this has occurred 22 times, and in 19 of those instances (86 percent), the S&P 500® was higher one month after the first occurrence of "extreme fear."

On Wednesday, March 18, the Chinese company Tencent will publish an interim report. In the meantime, the Swedish company Boliden will hold a capital markets day. The most important macroeconomic news of the day is the announcement of interest rates by the Federal Reserve. Before that, however, the Japanese current account balance for February and the consumer price index for February for the eurozone will be published. In addition, the US producer price index for February, industrial orders for January and the US Department of Energy's weekly oil inventories will be published.

On Thursday, March 19, FedEx will publish an interim report. The Swedish companies Coor, Ratos and BHG will each hold a capital markets day. In terms of macro statistics, the Japanese figures for machinery orders and industrial production in January will be presented first. In Europe, the European Central Bank (ECB), the Bank of England and the Swedish Riksbank will announce interest rates. In the USA, the Philadelphia Fed Index, weekly initial jobless claims, new home sales and wholesale prices for January will be published.

On Friday, March 20, the release of macro statistics will begin with the German producer price index for February. This will be followed by the Eurozone trade balance for January. Finally, the CBI industrial trends for March will be published from the UK.

The S&P 500® reached its year-to-date low on Friday, March 13, before recovering on Monday, March 16, and Tuesday, March 17, on the back of lower oil prices. The index is currently trading below the resistance level of 6750 points. A series of moving averages and a second resistance zone around 6900 points limit the upward trend. Without a decisive change in the situation in Iran towards a clear de-escalation or escalation and with oil prices holding at current levels, a market in a range between the 200-day moving average (currently 6615) and 6900 is most likely. However, the bulls must first recapture the MA20 at 6804. However, ahead of today's Fed dotplots, the negative momentum shown by the MACD and the falling MA20 should not be forgotten. All other things being equal, the risk is on the downside.

Apart from lower oil prices, the recovery of the NASDAQ-100 Index® and the S&P 500® was driven by Nvidia's USD 1 trillion revenue target and CEO Jensen Huang's product announcements. The NASDAQ-100 Index® bounced sharply off the MA200, currently at 24,318, and is now approaching the MA20, currently at 24,873. The next hurdle to the upside is the MA100, currently at 25,187. However, the momentum is still negative, so the risk is on the downside.

Germany's cyclical, energy-dependent economy has put pressure on the DAX, which has fallen by around 6% over the past month despite yesterday's 0.7% rise. As the chart below shows, the index remains capped by the EMA9. A breakout above this level would open up the zone between 24 000 and 24 335 points. The support levels are at 23 365, followed by 23 075 and 22 825.

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. The Fibonacci numbers are a sequence in which each subsequent number is the sum of the two previous numbers.

MA20: 20-day moving average

MA50: 50-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Convergence/divergence of the moving average

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