US job openings, according to the BLS report, rose to 6.95 million in January from 6.55 million in December, while layoffs declined. However, hiring did not increase significantly, indicating continued signs of weakness in the labor market. The ratio of job openings to unemployed workers remained at 0.9, reinforcing the Federal Reserve’s view that the labor market is not currently generating strong inflationary pressure.

According to an OPEC survey, the group’s oil output rose by 640,000 barrels per day last month to about 29.52 million barrels per day, with much of the increase coming from Saudi Arabia. The production boost occurred before the Iran-US/Israel conflict as regional tensions were rising. However, after disruptions to tanker traffic through the Strait of Hormuz, part of the Gulf countries’ production has been halted, keeping pressure on global oil markets.

The Islamic Republic of Iran has rejected Donald Trump's call for a ceasefire and intensified its missile and drone attacks on the UAE and Saudi Arabia. Following an Iranian drone strike on a fuel tank at Dubai Airport, flights were suspended for several hours, and the key oil port of Fujairah was targeted for the second time in three days. With the Strait of Hormuz remaining effectively closed, Brent crude oil prices have surged past $105 per barrel, pushing the region closer to total chaos as tensions enter the seventeenth day of the war.

As the Bank of England keeps interest rates unchanged this week, analysts believe the oil price shock from the Iran war has hit a cooling economy, unlike in 2022. With unemployment rising to a five-year high and demand weakening, policymakers face a historic dilemma: tackling inflation or preventing a recession. The experience of 2011 suggests the central bank may refrain from raising rates to avoid deepening the crisis. Markets are now pricing in a rate increase to 4% by December, rather than a cut.