{"id":60360,"date":"2026-03-31T00:38:35","date_gmt":"2026-03-31T04:38:35","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/"},"modified":"2026-03-31T00:38:35","modified_gmt":"2026-03-31T04:38:35","slug":"global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/","title":{"rendered":"Global Markets Shaken by Escalating Middle East Conflict: Central Banks Offload Treasuries as War Costs Mount"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Geopolitical_Crisis_Drives_Treasury_Sell-Off\" >Geopolitical Crisis Drives Treasury Sell-Off<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Middle_East_Conflict_Spills_into_Lebanon_and_Jordan\" >Middle East Conflict Spills into Lebanon and Jordan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Asian_Markets_and_Fixed_Income_Volatility\" >Asian Markets and Fixed Income Volatility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Corporate_Developments_and_AI_Infrastructure\" >Corporate Developments and AI Infrastructure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-escalating-middle-east-conflict-central-banks-offload-treasuries-as-war-costs-mount\/60360\/#Banking_Regulation_and_Diplomatic_Friction\" >Banking Regulation and Diplomatic Friction<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>Foreign central banks<\/strong> are liquidating <strong>US Treasuries<\/strong> at an accelerated pace as the <strong>US-Iran war<\/strong> enters its fifth week, creating significant liquidity strain in the <strong>$30 trillion<\/strong> government bond market.<\/li>\n<li>Geopolitical volatility has intensified following the deaths of <strong>three Indonesian UN peacekeepers<\/strong> in South Lebanon and the frequent activation of <strong>air raid sirens<\/strong> across several regions in <strong>Jordan<\/strong>.<\/li>\n<li>Asian financial markets are under severe pressure, with the <strong>South Korean Won<\/strong> plummeting to a <strong>17-year low<\/strong> and <strong>Taiwanese equities<\/strong> dropping more than <strong>2%<\/strong> in a single session.<\/li>\n<li><strong>Bharti Airtel<\/strong> (<a href=\"\/stock\/BHARTIARTL\">BHARTIARTL<\/a>) has successfully raised <strong>$1 billion<\/strong> from <strong>Carlyle<\/strong> (<a href=\"\/stock\/CG\">CG<\/a>) and other major private equity firms to fund a massive expansion of its data center infrastructure.<\/li>\n<li><strong>Oil prices<\/strong> continue to show significant upside potential toward the <strong>$120 per barrel<\/strong> mark, driven by supply disruptions in the <strong>Strait of Hormuz<\/strong> despite intermittent profit-taking.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Geopolitical_Crisis_Drives_Treasury_Sell-Off\"><\/span>Geopolitical Crisis Drives Treasury Sell-Off<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Foreign official entities and central banks have begun a historic divestment from <strong>US Treasuries<\/strong>, a move analysts describe as a &quot;scramble for liquidity&quot; rather than a traditional flight to safety. As the conflict with <strong>Iran<\/strong> enters its second month, the estimated daily cost of military operations has surged to nearly <strong>$1 billion<\/strong>, forcing investors to prioritize cash over long-term US debt.<\/p>\n<p>The <strong>10-year US Treasury yield<\/strong> recently breached <strong>4.1%<\/strong>, reversing typical wartime patterns where government bonds usually rally. This &quot;cracking&quot; of the financial bedrock comes as <strong>Gulf states<\/strong>, which collectively hold over <strong>$2 trillion<\/strong> in American assets, reportedly begin reviewing their exposure to US markets amid the widening regional instability.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Middle_East_Conflict_Spills_into_Lebanon_and_Jordan\"><\/span>Middle East Conflict Spills into Lebanon and Jordan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The human and political toll of the conflict is mounting, with <strong>Indonesia<\/strong> formally calling for strict adherence to international law after <strong>three of its UN peacekeepers<\/strong> were killed in South Lebanon. The soldiers, serving under the <strong>UNIFIL<\/strong> mission, died in separate incidents involving a projectile strike and a vehicle explosion near the Israeli-Lebanese border.<\/p>\n<p>In <strong>Jordan<\/strong>, air raid sirens have become a frequent occurrence, with over <strong>97 alerts<\/strong> recorded since the onset of hostilities. The latest sirens were triggered as <strong>Iranian missile trajectories<\/strong> passed through or near Jordanian airspace, prompting the <strong>Public Security Directorate<\/strong> to issue emergency safety instructions to citizens across the Kingdom.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Asian_Markets_and_Fixed_Income_Volatility\"><\/span>Asian Markets and Fixed Income Volatility<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <strong>2-year Japanese Government Bond (JGB) yield<\/strong> slid to <strong>1.345%<\/strong> on Tuesday, easing slightly from the 30-year highs reached earlier in the month. While yields have retreated from their peak, they remain elevated as the <strong>Bank of Japan<\/strong> weighs further interest rate hikes to combat inflation fueled by skyrocketing energy costs.<\/p>\n<p>Currency markets are reflecting similar distress, as the <strong>South Korean Won<\/strong> fell <strong>1%<\/strong> to cross the psychological barrier of <strong>1,500 KRW\/USD<\/strong>, its weakest level since the 2009 global financial crisis. Simultaneously, the <strong>Taiwan Equity Market<\/strong> dropped over <strong>2%<\/strong>, led by heavy selling in semiconductor giants as investors move to the sidelines.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Corporate_Developments_and_AI_Infrastructure\"><\/span>Corporate Developments and AI Infrastructure<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Despite the macro-economic gloom, the race for AI infrastructure continues to attract massive capital. <strong>Bharti Airtel<\/strong> (<a href=\"\/stock\/BHARTIARTL\">BHARTIARTL<\/a>) secured <strong>$1 billion<\/strong> in funding from a consortium led by <strong>Carlyle<\/strong> (<a href=\"\/stock\/CG\">CG<\/a>) to bolster its data center business, Nxtra. This move aligns with a broader trend of &quot;hyperscalers&quot; increasing capital expenditure to meet the surging demand for AI processing power.<\/p>\n<p>In the technology sector, UK-based chip start-up <strong>Fractile<\/strong> is reportedly seeking to raise <strong>$200 million<\/strong> in a direct challenge to the market dominance of <strong>Nvidia<\/strong> (<a href=\"\/stock\/NVDA\">NVDA<\/a>). Meanwhile, <strong>Jefferies<\/strong> analysts have shown confidence in the healthcare sector, lifting their target price for <strong>Merck<\/strong> (<a href=\"\/stock\/MRK\">MRK<\/a>) to <strong>$138<\/strong> from $132, citing strong performance in its core pharmaceutical portfolio.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Banking_Regulation_and_Diplomatic_Friction\"><\/span>Banking Regulation and Diplomatic Friction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In Europe, <strong>UBS<\/strong> (<a href=\"\/stock\/UBS\">UBS<\/a>) appears to be nearing a resolution with Swiss lawmakers regarding a <strong>$22 billion<\/strong> capital requirement plan. The signaled compromise aims to stabilize the Swiss banking sector following the integration of Credit Suisse, providing a rare moment of regulatory clarity amidst global uncertainty.<\/p>\n<p>However, diplomatic relations between the <strong>US and UK<\/strong> are showing signs of strain. Reports indicate &quot;cracks&quot; in security cooperation following heightened tensions between the <strong><a href=\"https:\/\/thestockmarketwatch.com\/live\/trump-stock-market\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Trump\">Trump<\/a> administration<\/strong> and UK Prime Minister <strong>Keir Starmer<\/strong>, potentially complicating the unified Western response to the ongoing Middle East crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Foreign central banks are liquidating US Treasuries at an accelerated pace as the US-Iran war enters its fifth 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