Macroeconomics: The Day Ahead for 12 March 2026

A busy looking statistical schedule featuring Japan’s BSI and UK RICS House Price surveys, inflation data from Brazil, India and Sweden, along with US weekly jobless claims, Trade and Housing Starts appears unlikely to offer material distractions from the Middle East conflict. The IEA’s monthly Oil Market Report may also go begging in terms of events, given that markets have already heard extensively from the IEA in relation to the global SPR release, with rate decisions in Peru, Serbia and Turkey all expected to see no change. Yesterday’s unanimous IEA decision to release 400 Mln bbls from global oil reserves (1/3 of total reserves of 1.2 Bln) is more than double the initial 182.7 Mln release in 2022 in response to the Russian invasion of Ukraine, in no small part a reflection of the fact that there is a far greater threat to output (as per IEA’s Birol: “the oil market challenges we are facing are unprecedented in scale”. Detail on the pace, duration and locations of the release (in 2022 it was around 2 Mln bbls per day) are yet to be published, but to offer some perspective, around 6.7 Mln bbls has been cut relative to February’s output thus far. While the oil market has been in surplus since the start of the year, it also has to be noted that global inventories are at a 5-yr low, and with 20% of seaborne oil flowing through the Straits of Hormuz, and most of the world’s spare production capacity located in the GCC, the need to act is obvious. The economic fall-out from the conflict now also needs to be even more carefully monitored, as for example can be seen in today’s headlines about: a) China imposing an immediate ban on exports shipments of gasoline, diesel and aviation fuel, and b) some GCC sovereign wealth funds reviewing investment pledges and sponsorship deals. While the Buy The Dip and Fear Of Missing Out conditioning of markets remains very much alive, as evidenced by the intermittent surges in risk asset prices and the scooping up of equally intermittent surges in new corporate bond issuance, the strains on financial stability are also very visible in the gating of high-profile private credit funds. Leaving aside the ambiguity of communications about the conflict, the attacks on tankers/shipping and energy infrastructure also highlight that even if hostilities were to cease, the clean-up and recovery thereafter will take a much longer time, and supply chain disruptions will persist for a lot longer, with risk premiums remaining elevated for even longer, even if at levels lower than current sky high levels – all of which imply that inflation risks will also likely endure.