Key Takeaways
- Iran's IRGC has officially closed the Strait of Hormuz, banning all shipping to and from ports of Israel’s allies and supporters, a move that threatens roughly 20% of global oil supply.
- Saudi Arabian defense forces intercepted six ballistic missiles launched toward Riyadh just as Ukraine and Saudi Arabia reached a new agreement on defense cooperation.
- Chinese banking giants ICBC (1398) and CCB (0939) beat full-year earnings estimates, reporting net incomes of 368.56 billion yuan and 338.91 billion yuan respectively.
- Ex-BoJ Governor Kuroda signaled a hawkish shift for Japan, stating that interest rates could rise 3-4 times through next year to reach approximately 1.5%.
- Eurozone inflation expectations for the next year fell to 2.5%, coming in below the estimated 2.8% and providing the ECB with more room to maneuver.
In a dramatic escalation of regional tensions, Iran’s Revolutionary Guard Corps (IRGC) announced on Friday the total closure of the Strait of Hormuz. According to Iranian media, the IRGC has prohibited all shipping to and from the ports of Israel’s allies and supporters, warning that any passage through the waterway will face "harsh measures" and "severe consequences."
The impact of the blockade was felt immediately as three container ships of various nationalities were turned back from the Strait following warnings from the IRGC Navy. This move effectively chokes off a critical artery for global energy and trade, sending shockwaves through commodity markets as traders brace for a massive disruption in oil and LNG transit.
Compounding the regional crisis, the Saudi Ministry of Defense reported the detection and interception of six ballistic missiles launched toward the capital, Riyadh. The attack occurred shortly after Ukrainian President Volodymyr Zelenskiy announced a new defense cooperation agreement with Saudi Arabia, signaling a deepening of ties between the two nations amidst the broader geopolitical instability.
In the financial sector, China’s largest lenders provided a rare bright spot as they released their fiscal year results. Industrial and Commercial Bank of China (1398) reported a net income of 368.56 billion yuan, slightly exceeding the 368.25 billion yuan estimate. Similarly, China Construction Bank (0939) posted a net income of 338.91 billion yuan, beating the 338.4 billion yuan forecast.
Despite the strong earnings, the People’s Bank of China (PBOC) remains cautious, vowing to "hold the bottom line" of preventing systemic financial risks. The central bank stated it would steadily resolve risks in key financial areas and improve its prevention and resolution systems, while the Commerce Minister expressed readiness to increase imports from the EU if high-tech export restrictions are eased.
Monetary policy outlooks also shifted significantly in Japan and Europe. Former Bank of Japan Governor Haruhiko Kuroda stated in an interview with Asahi that Japan is on an "appropriate and stable growth trajectory," suggesting that the policy rate could reach 1.5% by next year. Meanwhile, the ECB reported that one-year CPI expectations fell to 2.5% in February, a notable drop from the previous 2.6% and lower than the 2.8% analysts had anticipated.
In other news, the U.S. Senate has voted to end the DHS shutdown, with the exception of funding for ICE and CBP, shifting the legislative focus to the House. In the technology sector, a suspect in a Super Micro Computer (SMCI) chip-smuggling scheme was revealed to have operated a business in Japan, highlighting ongoing concerns regarding the illicit transfer of high-tech components. Additionally, Austria announced plans to prohibit social media use for children under 14, marking a significant regulatory move in the European digital landscape.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.