Financial Markets Daily Report
06 March 2026
Heightened geopolitical tensions kept markets volatile as the Middle East conflict entered its sixth day. Energy prices moved higher, with Brent crude rising to $85/barrel and TTF gas to €50/MWh. Equities extended their sell-off in the US and the euro area after their short rebound on Wednesday, while the dollar strengthened, pushing EUR/USD toward 1.16.
Sovereign bond yields rose sharply as concerns over renewed inflationary pressures from potential energy supply disruptions intensified. Markets increased the probability of a 25bp ECB rate hike in 2026 to around 80%, pushing euro area sovereign yields more than 10bp higher, while the probability of a second Fed rate cut this year fell below 60%.
On the macro front, weekly US jobless claims remained broadly unchanged, signaling continued stability in the labour market ahead of the February employment report due later today. In the euro area, retail sales came in lower than expected, falling by 0.1% MoM in January.