​EBC Markets Briefing | Euro lower on natural gas upsurge; Iran war intensified

The euro dipped on Monday as escalating retaliatory threats in the Middle East conflict curbed risk appetite and lifted demand for safe-haven assets. The ECB kept interest rates steady last week.

JP Morgan, Morgan Stanley and Barclays all revised their forecasts for the Eurozone to anticipate future hikes after President Christine Lagarde warned of a "significantly more uncertain" outlook with risks to inflation.

Natural gas prices in the region hit the highest level since January 2023 following Iran's strikes on Qatar's LNG hub on Wednesday. That is the most severe energy shock after sanctions on Russia.

The conflict broadened on Monday, with Israel announcing wide-scale strikes on Tehran, while Saudi Arabia said two ballistic missiles had been launched at Riyadh.

Iran criticized French President Macron, accusing him of failing to condemn Israel and the United States' war with the Islamic republic, while voicing concern over Tehran's retaliation.

A report by the Washington Post suggests Hungary's foreign minister Péter Szijjártó shared confidential reports of EU Council meetings with his Russian counterpart Lavrov.

The euro began to rally around two weeks ago, but the upside was on a shaky ground given geopolitical uncertainties. We expect it to retest the low of $1.1524 hit lately.

Asset recap

As of market close on 20 March, among EBC major products, UK Brent Crude led gains. Trump warned on Saturday that he would "eliminate" Iran's power generation facilities unless Tehran reopened the Strait of Hormuz within 48 hours.

Marsh & McLennan shares jumped after its business, Mercer, agreed to acquire AltamarCAM, a specialist private markets asset manager and solutions provider.

XPeng saw its first-ever quarterly profit in Q4, but management's guidance for a double-digit revenue and delivery decline in the first quarter of 2026 highlights ongoing pressure from subsidy rollbacks and intense EV competition.

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