The 24 February–2 March week was dominated by escalating Middle East tensions, US–Israeli strikes on Iran, and a powerful bid for safety that drove core bond yields to new cycle lows. US 10‑year Treasuries closed below 4% for the first time since mid‑2024, the 2‑year dipped toward 3.35%, and credit spreads widened, signalling that markets are increasingly pricing slower growth, higher geopolitical risk, and more cautious central‑bank policy ahead.
The US dollar remained under pressure on a year‑to‑date basis, with broad indices still lower after a 9% decline in 2025, but safe‑haven demand and lower yields produced a choppy, range‑bound week rather than a clean trend.
High‑beta FX and EM currencies lagged into the Iran headlines, while traditional havens such as the Swiss franc and, to a lesser extent, the yen found support as risk assets wobbled.
Policy‑sensitive pairs stayed glued to rate‑expectation swings, with traders watching upcoming US labour data and global inflation prints to refine views on the Fed, ECB, and RBA paths.
Energy markets were the immediate shock absorber. Brent crude spiked intraday toward 82 USD and WTI toward 73.5 USD on supply‑disruption fears, before easing as Gulf producers flagged potential output increases to offset lost Iranian barrels, leaving prices still near multi‑month highs.
Natural gas rallied close to 5% on the session as traders priced bottleneck risk in key transit routes.
Gold traded in a tight range around 5,200 USD for most of the week, then surged by roughly 100 USD per ounce to about 5,375 USD in late Asian trading on Monday as markets digested the Iran strikes, bringing it back within touching distance of January’s record close; silver also jumped aggressively and held near recent highs above 90 USD.
Global equities tried to absorb the geopolitical shock against a backdrop of lower yields and still‑solid earnings.
European benchmarks such as the STOXX indices managed to close the week marginally higher or near record territory, helped by their sector mix and support from lower bond yields.
US indices were more mixed: earlier AI‑ and tech‑driven momentum met headwinds from war‑risk headlines, leaving futures down over 1% at the start of March and signalling a cautious tone even as the equal‑weighted S&P 500 remains up solidly year‑to‑date.
In Asia, the Hang Seng gained nearly 1% and the broader region proved relatively resilient, but investors continued to differentiate sharply between markets with direct energy‑price exposure and those that benefit from lower global yields.
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