Morning Wrap: ASX 200 to fall, S&P 500 slips, Bond yields climb on rate hike bets

ASX 200 futures are down 47 pts (-0.54%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly lower, indices traded in a relatively narrow range, showing limited upside and downside (S&P 500 finished 0.08% lower, vs session highs of 0.44% and lows of -0.53%)

• Bond yields are soaring, with the US 2-year yield up 6 bps to the highest since September 2025, Aussie 10-year up 8 bps to 4.96%, the highest since October 2023 and on the cusp of fresh 15 year highs

• G7 agrees to release a combined 400 million barrels of oil from the Strategic Petroleum Reserve, WTI still closes the overnight session up 2.3% (despite falling as much as 5.3%)

Let's dive in.

Overnight Summary

Thu 12 Mar 26, 8:20am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,776	-0.08%
Dow Jones	47,417	-0.61%
NASDAQ Comp	22,716	+0.08%
Russell 2000	2,543	-0.20%
Country Indices
Canada	33,120	-0.45%
China	4,133	+0.25%
Germany	23,640	-1.37%
Hong Kong	25,899	-0.24%
India	76,864	-1.72%
Japan	55,025	+1.43%
United Kingdom	10,354	-0.56%

Name	Value	% Chg
Commodities (USD)
Gold	5,176.0	-0.25%
Copper	5.86	-0.66%
WTI Oil	88.41	+5.89%
Currency
AUD/USD	0.7157	+0.06%
Cryptocurrency
Bitcoin (USD)	70,660	+0.49%
Ethereum (AUD)	2,895	+1.33%
Miscellaneous
US 10 Yr T-bond	4.208	+1.74%
VIX	24.23	-2.81%

S&P 500 SESSION CHART

S&P 500 slightly lower in a relatively sideways session (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower, in a choppy and sideways session

• A relatively uneventful session, where indices struggled to hold onto gains but showed limited downside amid more headline volatility around the Iran war and whipsaw oil prices

• Trump continues to stress that the war will end soon, while US and Israeli military officials expect at least two more weeks of operations

• Bond yields are breaking out – US 2-year up 6 bps to 3.65% (highest since Sep-25), US 10-year up 7 bps to 4.22% (one-month high) and Australia 10-year up 8 bps to 4.96% (highest since Oct-23)

• Soaring yields mirrors recent shifts in global central bank interest rate expectations, with traders boosting ECB and BOE rate hike bets, pushing back Fed rate cut expectations

• Hedge fund positioning in US equities has flipped bearish, with short exposure at the highest since Sep-22, creates a setup for stocks to surge, according to Goldman Sachs (YF)

• Pimco commodity hedge fund has plunged 17% so far this year amid turmoil caused by Iran war (BBG)

• Traders flip to betting against Treasuries, longs liquidated as yields surge alongside crude prices (BBG)

• China stocks weather global volatility following years-long effort to bolster energy security (BBG)

ENERGY

• G7 agrees to release a combined 400 million barrels from the Strategic Petroleum Reserve, the largest-ever SPR release (YF)

• G7 leaders reject lifting Russian sanctions despite Middle East oil crisis (WSJ)

• US national average for gasoline crosses US$3.50 (RT)

• Oil storage hit by drones in Omani port of Salalah (RT)

• Mixed messages from White House about Strait of Hormuz naval escorts, mine activity, fuels extreme oil market volatility (BBG)

• EIA predicts US fuel and diesel prices unlikely to return to prewar levels until mid-2027 at earliest (FT)

• Iran's oil and gas exports to Asia surge despite sanctions (CNBC)

• Middle East conflict reroutes global LNG flows, impacting European and Asian markets (BBG)

• Qatar's LNG export pause, longest in 18 years, signals potential price surge, particularly in Europe (BBG)

• China's vast oil reserves cushions impact on refiners from Iran conflict (BBG)

IRAN

• Trump repeated the war with Iran will end soon because there is practically nothing left to target (AX)

• Iranian president says only way to end war is to recognise Iran's rights, pay reparations, and guarantee no future aggression (X)

• Iran tells world to get ready for oil at US$200 a barrel as it fires on merchant ships (RT)

• S&P warns Iran conflict is starting to strain credit channels across sectors (SP)

STOCKS

• Oracle guidance tops expectations as cloud growth accelerates, RPO growth driven by large-scale AI contracts unlikely to require raising additional funds, shares rally 9% but still down ~50% since Sep-25 (CNBC)

• JPMorgan marking down collateral held by private credit firms and reducing their borrowing capacity (CNBC)

• KKR's publicly traded private credit fund has experienced pressure on near-term returns, says CFO (RT)

• Campbell's cuts its profit outlook to the lowest in a decade amid sluggish snack sales (BBG)

• Meta unveils four custom, in-house chips tailored for artificial intelligence-related tasks (CNBC)

• Google expands Pentagon AI contracts amidst public disputes between OpenAI and Anthropic (AX)

• Microsoft supports Anthropic in legal dispute with the Pentagon over supply chain risk designation (FT)

• Amazon spearheads record day for US corporate borrowing with $40bn bond offering (FT)

• US airlines face significant fuel cost increase due to Iran conflict (FT)

• JPMorgan downgrades private credit loans, tightens lending amid AI disruption fears (RT)

• Nintendo shares surge as new Pokémon game boosts sales, mitigating chip cost concerns (BBG)

CENTRAL BANKS

• Elevated energy costs risk delaying Fed's progress to 2% inflation while labour market remains fragile (NYT)

• Iran war complicates BOJ rate hike expectations with oil spike either accelerating inflation or weakening economy (NK)

• More Australian bank economists predict RBA will deliver second straight rate hike next week amid persistent inflation (BBG)

ECONOMY

• US February core CPI up 0.2% month-on-month and headline up 0.3%, both in-line with consensus, shelter came in at 0.2% with rent of primary resident up just 0.1% (lowest since Jan-21), though tariff having an impact on several categories such as apparel up 1.3% and appliances up 3.1%, analysts note the data is stale given the recent oil price spike (BBG)

ASX TODAY

• Air New Zealand suspends FY26 guidance due to jet fuel market volatility, says guidance was based on average jet fuel price of US$85, which has now spiked to US$150-200 (AIZ)

• Collins Food issues YTD trading update – Australia, Germany and Netherlands total sales up 5.6%, 8.7% and 4.4% respectively (CKF)

• Collins Food to acquire eight restaurants in Bavaria for €31m, immediately EPS accretive, anticipated revenue in the first 12 months of ownership at ~€28m (CKF)

WHAT TO WATCH TODAY

• Airlines: Starting to see more media coverage and company announcements relating to jet fuel market volatility. Air New Zealand said its 83% hedged against Brent, but "remains exposed to movements in the crack spread," and expect this to "meaningfully affect second-half earnings."

• Energy: WTI up 2.3% overnight despite being down as much as ~5%, really shrugging off SPR headlines. Energy was the best performing S&P 500 sector (+2.48%), flagging some potential optimism around higher prices or prices rebasing at a higher level in the medium term.

• Yields: It was relieving to see the Aussie 10-year whipsaw back to a flattish close on Monday, 9 March (up as much as 11 bps to 5.00%, but finished the session down 3 bps to 4.85%). Unfortunately, the 10-year is now within an arms reach of 5.0%. Not a good look for markets.

BROKER MOVES

• Lynas upgraded to Hold from Sell; target up to $19.00 from $11.60 (BP)

Stocks trading ex-dividend: 

• Thu 12 Mar: ACL Australian Clinical Labs (ACL) – $0.037, AUB Group (AUB) – $0.27, EDV Endeavour Group (EDV) – $0.108, Embelton (EMB) – $0.15, Globe International (GLB) – $0.10, Infragreen Group (IFN) – $0.005, Inghams Group (ING) – $0.04, Joyce Corporation (JYC) – $0.13, Kogan.com (KGN) – $0.08, Mcmillan Shakespeare (MMS) – $0.62, Motorcycle Holdings (MTO) – $0.095, Pepper Money (PPM) – $0.078, Perpetual Equity Investment Company (PIC) – $0.04, Perpetual (PPT) – $0.59, Regis Healthcare (REG) – $0.09, Regis Resources (RRL) – $0.15, SRG Global (SRG) – $0.03, Summerset Group Holdings (SNZ) – $0.095, Super Retail Group (SUL) – $0.32, Viva Energy Group (VEA) – $0.039

• Fri 13 Mar: Ariadne Australia (ARA) – $0.005, CAR Group (CAR) – $0.425, Fleetwood (FWD) – $0.095, Glennon Small Companies (GC1) – $0.01, Guzman Y GOMEZ (GYG) – $0.074, Wisetech Global (WTC) – $0.096

Other ASX corporate actions today:       

• Dividends paid: Amotiv (AOV), Bravura Solutions (BVS), Codan (CDA), Vicinity Centres (VCX) 

• Earnings: Meeka Metals (MEK)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.