G7 energy ministers announced support for using strategic reserves to address oil supply disruptions and market volatility after the Iran war began. In a virtual meeting with the IEA, they reviewed the impact of the Iran conflict on energy markets and supply, emphasized coordination with IEA members and international partners, and welcomed proactive measures including tapping strategic reserves.

The International Energy Agency (IEA) has proposed the largest release of emergency oil reserves in its history, between 300 and 400 million barrels, to control sharp oil price increases caused by the Middle East war. This exceeds the 182 million-barrel intervention in 2022 after Russia's invasion of Ukraine and includes US strategic reserves and those of other OECD countries. However, some analysts doubt that these reserves can quickly cover the daily supply shortfall of 11 to 16 million barrels from the Persian Gulf

The Australian dollar has emerged as an unexpected haven amid the Iran crisis, rising to 71.68 US cents, its highest level since June 2022 and a 35-year high against the yen, supported by higher oil and gas prices and expectations of an RBA rate hike. Investors expect rates to rise on March 17, and Australia's position as a major energy exporter supports the currency. Markets forecast a roughly 33% chance of the Australian dollar reaching 75 US cents within three months, and the currency remains relatively resilient to global volatility.

The PCE price index will be released today, with markets expecting the core reading to rise 0.4%. Despite the recent softness in Consumer Price Index (CPI) data, economists anticipate that the Personal Consumption Expenditures (PCE) price index the Federal Reserve’s preferred inflation gauge will show stronger price pressures. While core CPI usually runs above PCE, the faster growth in PCE has created an unusual gap between the two measures, with core PCE expected to reach around 3.1%. Meanwhile, rising oil prices amid the Iran war are increasing the risk of higher inflation in the coming months, potentially complicating the Federal Reserve’s path toward interest-rate cuts as higher energy, transportation, and food costs add fresh inflationary pressures.