Oil prices play a key role

Since the US-Israeli war with Iran began on February 27, the price of Brent crude oil has increased from around $73 per barrel to around $100 per barrel. Despite Western countries releasing parts of their strategic oil reserves, oil prices have continued to rise. Recently, the US damaged Iran's oil infrastructure on Kharg Island. Kharg handles approximately 90% of Iran’s crude oil exports, which is vital for both Tehran’s economy and the global oil market. However, this increases the likelihood ofIran retaliating by attacking oil production facilities in Saudi Arabia and other smaller Gulf states.

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 alongside the United States in keeping the strait "open and safe." He listed China, France, Japan, South Korea, and the United Kingdom as countries that he hopes will hopefully contribute. However, Britain and Germany have already refused Trump’s offer, while Japan and South Korea's response can, at best, be described as a wait-and-see approach. 

If the war continues, there will be other long-term consequences. One such consequence would be an increased price of cereals, such as wheat. Since transportation and food production depend heavily on fuel, higher oil prices directly lead to higher production costs for agriculture and more expensive transportation.

Iran has effectively blocked the Strait of Hormuz, a vital shipping route for global trade. This is causing problems for shipping companies, resulting in delays and increased shipping costs. Between one-third and one-half of all global fertilizer shipments pass through the Strait of Hormuz. Fertilizer is one of the most important goods for agriculture, and it is currently almost impossible for cargo ships to navigate the strait. We believe this will affect food production in most countries within three months, with prices in stores rising soon thereafter.Global grain production has already been under strain since Russia’s invasion of Ukraine in 2022. The conflict has disrupted Ukraine’s grain productioion, and blocked shipping ports on the Black Sea. According to the UN Food and Agriculture Organization, the top five wheat producers in 2024 were China, India, Russia, the United States, and Canada. By then, Ukraine had fallen to ninth place. As shown in the five-year weekly chart below, the price of Chicago Soft Wheat Futures was more than double today's price when the Russia-Ukraine war started in the first half of 2022.

U.S. stock markets fell further 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, marking the first time the index has been in "Extreme Fear" since November 2025. This has occurred 22 times in the past five years, and in 19 of those instances (86%), the S&P 500 was higher one month after an "extreme fear" situation was first noted.

On Wednesday, March 18, Chinese company Tencent will release an interim report. Meanwhile, Swedish Boliden is holding a capital markets day. The most important macroeconomic news of the day is the Federal Reserve's interest rate announcement. Prior to this, however, we will receive the current account balance for February from Japan and the CPI for February for the eurozone. We will also receive the U.S. producer price index for February, industrial orders for January, and weekly oil inventories from the U.S. Department of Energy.

On Thursday, March 19, FedEx will release an interim report. The Swedish companies Coor, Ratos and BHG will each host a capital markets day. In terms of macro statistics, Japan's January machinery orders and industrial production figures will be presented first. In Europe, interest rate announcements will come from the European Central Bank (ECB), the Bank of England, and the Swedish Riksbank. The U.S. will contribute the Philadelphia Fed Index, weekly initial jobless claims, and new home sales and January’s wholesale prices.

On Friday, March 20, the release of macro statistics will begin with Germany's February producer price index. Next is the Eurozone's January trade balance. Finally, the UK's CBI industrial trends for March will be released.

The S&P 500 reached its year-to-date (YTD) low on Friday, March 13, before recovering on Monday, March 16, and Tuesday, March 17, due to lower oil prices. Currently, the index is trading below the6,750 resistance level. A cluster of moving averages and a second resistance zone around 6,900 are capping the upside. Without a decisive shift in the situation in Iran towards clear de-escalation or escalation, and with oil prices holding at current levels, the most likely outcome is a range-bound market between the 200-day moving average (currently 6,615) and 6,900. However, bulls must first reclaim the MA20 at 6,804. Ahead of today’s Fed dot plot, however, the negative momentum illustrated by MACD and the falling MA20 should not be forgotten. All else being equal, the risk lies on the downside.

Beyond softer oil prices, the rebound in the NASDAQ-100 and the S&P 500 was driven by Nvidia's $1 trillion revenue target and CEO Jensen Huang's product announcements. The Nasdaq 100 bounced cleanly off the MA200, which is currently at 24,318, and is now approaching the MA20, which is currently at 24,873. The next upside hurdle is the MA100, which is currently at 25,187. However, momentum remains negative, so the risk is skewed to the downside.

The OMXS30 has mirrored the volatile nature of global markets. As the chart below shows, the index is struggling to reclaim the EMA9 level, with the nearest support around 3,000. Momentum remains negative, keeping the risk skewed to the downside. A drop below 3,000 would expose the MA100 at 2,930. Conversely, reclaiming the EMA9 level would bring the MA20, currently at 3,112, into focus.

Germany's cyclical, energy-sensitive economy has put pressure on the DAX, which has fallen by around 6% over the past month, despite yesterday's 0.7% increase. As the chart below shows, the index remains capped by EMA9. Breaking above this level would open up the 24,000–24,335 zone. 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. Fibonacci numbers are a sequence in which each successive 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: Moving Average Convergence Divergence