Morning Bid: Prime-time disappointment

A look at the day ‌ahead in European ​and ​global markets from Ankur Banerjee

In a 19 minute prime-time address, U.S. President Donald Trump squashed burgeoning hope among investors of an end to ‌the war in the Middle East, saying Washington will hit Iran "extremely ⁠hard" over the next two to three weeks.

With no timeline for an end to the U.S.-Israeli war ‌with Iran and with the ‌Strait of Hormuz staying closed, investors were quick to return to what they did in March: Selling stocks, buying U.S. dollars and sending oil prices higher.

Trump ​repeated calls for countries that rely on Gulf oil to "take the lead" and assume the burden of reopening the waterway on which Iran has a ⁠chokehold that has created what some market watchers have called the worst global energy shock in history.

The prospect of ​an end to the month-long war had lifted global stocks and knocked the dollar off recent highs over the past two ​trading sessions after a brutal March where soaring ‌oil prices sent risk assets into a tailspin.

But those moves were being reversed on Thursday after the speech as traders who ⁠had added risk this week were swiftly exiting those positions, bracing for a prolonged energy shock to spur worry over stagflation - rapid inflation with slow growth.

So Brent crude futures are once ⁠again well above $100 a barrel, while U.S. stock futures and European futures point to an ugly ​open with both down more than 1%.

Over in Asia, which has borne the brunt of the oil shock as most of the economies in the region heavily rely on energy from ‌the Middle East, it was a sea of red with almost all bourses sliding sharply. U.S. Treasuries were also down.

With most ‌major Western markets closed tomorrow for the Good Friday holiday, investors could de-risk extensively, ⁠hoping to not get caught out ‌by any weekend escalation.

Key developments ​that could influence markets on Thursday:

* U.S. jobless data * EIA weekly estimate of U.S. natural gas in undergroundstorage

(By Ankur Banerjee; Editing by ‌Christopher Cushing)

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