Monthly Review - March 2026
In brief
The markets
-5.1%
-8.9%
-6.1%
-9.3%
-10.3%
-7.1%
-6.7%
-6.8%
-11.2%
Source: Bloomberg 31.03.2026, returns in local currency
Top stories
Oil prices soar
Escalation of the Middle East conflict triggered financial market volatility, as the price of oil jumped more than 50%. Oil flows from the Gulf States dried up, as the passage of tankers through the Strait of Hormuz was blocked. A fifth of world oil exports passes through this vital channel. The IEA (International Energy Agency) called it the largest supply disruption in history, meanwhile releasing an unprecedented 400 million barrels of oil from reserves, to ease short term supply issues. With US midterm elections looming, a protracted period of pain on gasoline prices is unlikely to play well with voters.
Rate hikes climb the agenda
As crude oil and fertiliser prices soared, economists cranked their inflation forecasts higher. The US Federal Reserve (Fed) left interest rates on hold, advising that it was too soon to know the “scope and duration” of any effect on the economy. But markets quickly ruled out any further cuts to interest rates, instead factoring in a succession of rate hikes. The fuel price surge further risks holding back economic growth, if consumers and companies delay spending decisions. Central banks will need to tread a fine line to avoid a bout of ‘stagflation’, where growth stalls in the face of rising prices.
Sales forecast falls flat
Nvidia CEO Jensen Huang announced a revenue forecast of $1 trillion by 2027, as demand for its AI enabling microchips continues to soar. The arrival of ‘agentic AI’, or personal agent tools such as OpenClaw, is driving demand ever higher in the quest for greater computing power. And yet, despite this forecast and a faultless set of quarterly results, markets expressed doubt as to Nvidia’s longer term growth potential and the share price closed the day lower. Elsewhere, SpaceX, the space rockets to AI group founded by Elon Musk, is preparing a $75 billion fund raising round, valuing the company at $1.75 trillion.
An environmental silver lining
The world’s energy importing economies are drawing parallels with the energy shock that followed Russia’s invasion of Ukraine, as the conflict in the Middle East continues. The strategic chokehold on energy exports through the Strait of Hormuz has also caused Brent crude and liquefied natural gas prices to soar. This has prompted several global leaders to push for the rapid expansion of renewable energy sources, in order to reduce their reliance on imported fossil fuels. Perhaps to the frustration of the US administration, an unintended consequence of ‘Operation Epic Fury’ could ultimately be an accelerated pivot to low carbon energy.
On the radar
The macroeconomic impact of the Middle East conflict will be discussed at the Spring meetings of the IMF (International Monetary Fund) and the World Bank, with updated global economic outlooks due to be released in mid April.
After holding interest rates steady at 0.75% in March, hawkish commentary from Bank of Japan Governor Kazuo Ueda bolstered expectations of further rate hikes, as early as April. However, Middle East tensions are set to exacerbate both inflationary and recessionary risks for the energy importing Japanese economy.
Hungary’s upcoming parliamentary election will draw intense scrutiny, as President Viktor Orbán seeks to extend his 16 year grip on power. While Orbán’s supporters highlight his track record of strong leadership and economic stability, his opponents will likely raise concerns around democratic backsliding.