Daily Market Outlook, March 20, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

As the weekend draws near, financial markets display mixed signals as oil prices take a step back; however, equity markets experienced turbulence heading into Friday, with investors closely monitoring developments from the US and Israel aimed at easing concerns over tensions with Iran. The MSCI Asia Pacific Index fluctuated before slipping 0.2%. Meanwhile, S&P 500 futures edged slightly higher as Wall Street prepared for a significant wave of options set to expire, while European stocks rebounded 0.7% following Thursday’s selloff. Brent crude, which had recently hit its highest close since July 2022, retreated to around $107 per barrel. Trading activity in Asia slowed due to holidays in Indonesia, Malaysia, and the Philippines, while Japanese markets remained closed, leaving no cash trade for Treasuries during Asian hours. Despite some volatility, the MSCI Asia benchmark managed a 0.2% gain for the week, recovering from losses over the prior two weeks. However, heavyweight Alibaba weighed on the index, with its shares tumbling as much as 6.4% in Hong Kong after disappointing sales figures. The company’s sluggish performance in its core e-commerce division dampened investor sentiment. Currency markets also saw notable movements. The Dollar Index climbed 0.2% on Friday, reversing some of the 0.7% drop from the previous day. The Indian Rupee hit a fresh record low, breaching the 93-per-Dollar mark.

The latest UK ONS data shows the government borrowed £14.4bn in February, exceeding expectations. This contrasts with January's figures, where borrowing was lower than anticipated. A reversal of January’s positive news was anticipated, which has now materialised. For 2025-26, the government’s cash requirement is now projected to be ~£9bn lower than the November 2025 Budget forecast, compared to the earlier estimate of ~£22bn lower. This aligns with the OBR’s recent Spring Forecast, which adjusted the full-year cash requirement down by just £4.5bn. While the government will end this fiscal year with more cash than expected, the surplus is smaller than many anticipated. For gilt markets, any reduction in the 2026-27 financing programme after next month’s 2025-26 outturn is likely to be modest (~£0-5bn), far below earlier estimates of >£10bn. However, rising energy prices and inflation, as noted by the BoE, along with higher gilt yields, could add ~£11bn to this year’s debt interest bill, increasing financing pressures for 2026-27.

After a bevy of central bank decisions this week, the RBA remains the most hawkish, standing out as the only one to hike rates, driven by domestic factors rather than external pressures like the Middle East energy crisis. Their focus remains firmly on inflation risks, prioritising them over concerns about economic activity. The BoE has shifted gears, dropping its easing guidance and signalling a readiness to act decisively. February’s vote showed unanimous support for potential rate hikes, with inflation risks skewed to the upside and CPI expected to exceed 3% by Q3. Meanwhile, the ECB has taken a proactive stance on inflation, incorporating second-round effects of higher energy prices into its projections and revising core CPI forecasts above 2%, demonstrating greater urgency than its peers. In Japan, the BoJ maintains a domestic focus, particularly on food prices and the labour market, with limited attention to the situation in the Middle East. However, rising energy price inflation could provide justification for tightening down the line. The Riksbank is treading a balanced path, acknowledging that rate moves could go either way as it closely monitors developments without committing to immediate action. The BoC adopts a pragmatic approach, emphasising the implications of the Middle East crisis over tariffs and focusing on second-round energy effects, although no immediate policy changes are on the horizon. The Fed appears less hawkish in comparison, holding a median forecast for one rate cut this year. Long-term inflation expectations remain unchanged, suggesting that second-round effects are not yet a concern. Finally, the SNB stands out as an outlier, prioritising exchange rate interventions to counter CHF appreciation amid heightened global economic risks.

Overnight Headlines

• EU Leaders Confront Multi-Year Energy Squeeze After Qatar Hit

• Saudi Arabia Sees Oil Spiking To $180 If Energy Shock Persists

• Israel To Halt Strikes On Iranian Gas Facility At Trump’s Request

• RBNZ To Hold News Conference With April 8 OCR Review

• New Zealand Exports Rise, But Global Risks Loom

• China Keeps Loan Prime Rates Steady As Expected

• China Curbs ‘Low-Quality’ Listings To Cool Hong Kong IPO Boom

• SEC Urged To Restrict Chinese Firms’ Access To US Capital Markets

• FedEx Posts Higher Third-Quarter Sales, Boosts Outlook

• Nvidia’s Jensen Huang Urges AI Leaders To Avoid Fearmongering

• Jeff Bezos Raising $100B For AI Manufacturing Fund

• Treasury Says Cuba Can’t Receive Russian Oil Shipment

• UN Says ‘Reasonable Grounds’ Both Sides Committing War Crimes

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• Friday 20/03 – EUR/USD: 1.1350 (€910m), 1.1370 (€1.4bn), 1.1380 (€748m), 1.1400 (€1.5bn), 1.1450 (€1.0bn), 1.1450 (€765m), 1.1465 (€780m), 1.1500 (€1.5bn), 1.1550 (€731m), 1.1580 (€711m), 1.1645 (€609m), 1.1650 (€748m), 1.1740 (€833m)

• Friday 20/03 – AUD/USD: 0.6900 (A$1.2bn), 0.7050 (A$1.1bn), 0.7100 (A$580m), 0.7200 (A$1.0bn)

• Monday 23/03 – EUR/USD: 1.1600 (€98.2m), 1.1650 (€512m)

• Monday 23/03 – USD/CHF: 0.7935 ($912m)

• Monday 23/03 – GBP/USD: 1.3650 ($563m)

CFTC Positions as of March 13, 2026: 

• Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 173,130 contracts, bringing it down to 1,917,664 contracts. Similarly, the net short position in CBOT US 10-year Treasury futures has been decreased by 119,624 contracts, now totaling 534,883. The net short position for CBOT US 2-year Treasury futures has seen a minor reduction of 305 contracts, reaching 1,338,236. In contrast, speculators have increased their net short position in CBOT US UltraBond Treasury futures by 34,408 contracts to a total of 290,102. There has also been a rise in the net long position for CBOT US Treasury bonds futures by 21,772 contracts, bringing it to 42,037. 

• The Swiss franc has a net short position of -41,092 contracts, while the British pound shows a net short position of -84,197 contracts. On the other hand, the Euro has a net long position of 105,144 contracts, and the Japanese yen records a net short position of -41,387 contracts.The net long position for Bitcoin stands at 1,302 contracts

Technical & Trade Views

SP500

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 6800 Target 6920

• Below 6700 Target 6500

EURUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.1675 Target 1.1730

• Below 1.15 Target 1.1350

GBPUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.35 Target 1.3650

• Below 1.3485 Target 1.3150

USDJPY 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 159 Target 161.50

• Below 155 Target 152

XAUUSD

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 5150 Target 5325

• Below 4950 Target 4250

BTCUSD 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 79.5k Target 81.5k

• Below 78k Target 53k