Global markets moved into a risk-off phase during the week ending 6 March 2026, driven by escalating geopolitical tensions in the
Middle East, a sharp surge in oil prices, and weaker-than-expected U.S. labour market data. The combination of rising energy prices
and slowing employment growth complicated the macro-outlook, increasing volatility across equities and rates. Meanwhile,
developments in private credit and continued investment in AI infrastructure highlighted structural shifts occurring alongside the
near-term macro uncertainty.
Key Themes
- Geopolitical escalation increased market volatility: The conflict involving the United States, Israel, and Iran intensified
during the week, raising concerns about broader regional instability. The developments triggered a broad risk-off move
across global equity markets as investors reassessed geopolitical risks. - Oil price surge revived inflation concerns: Energy markets reacted sharply to geopolitical tensions, with oil prices rising
significantly as markets priced in supply disruption risks. Higher energy prices increased inflation expectations and
contributed to rising government bond yields. - Weak US labour data raised growth concerns: February U.S. nonfarm payrolls unexpectedly declined by ~92,000,
signalling a slowdown in labour market momentum. The data increased uncertainty around the outlook for economic growth
and the timing of potential Federal Reserve policy easing. - Private credit sector developments drew investor scrutiny: Redemption pressures across several large private credit
funds highlighted liquidity considerations in semi-liquid lending vehicles, prompting increased market attention on liquidity
management and valuation practices within the sector. - AI investment cycle remains a structural market theme: Technology companies continued expanding capital spending
on AI infrastructure and computing capacity, reinforcing expectations that AI-driven demand will remain a key driver of
growth across the semiconductor and cloud computing sectors.
