CROSS ASSET: Oil Off Highs After Turkish Ship Passes Strait Of Hormuz
Bonds and equities trade away from session lows and the broader USD pulls back from highs as crude backs off from session highs.
- The pullback in crude was already in play before an Axios report, suggesting that President Trump told G7 leaders in a virtual meeting Wednesday that Iran is "about to surrender”, provided some brief additional downside.
- Our commodities team didn’t see a clear driver for weakness in crude oil at the time but a RTRS report covering comments from the Turkish Transport Minister noted that “a Turkish-owned ship that had been waiting near Iran was allowed to pass through the Strait of Hormuz after authorities received permission from Tehran”. Prior dissemination of the comments may have generated at least some of the recent downside in crude.
- If a Turkish vessel has been allowed passage through the Strait it may help to explain/verify comments made by Iran’s Deputy FM yesterday, noting that Iran has allowed ships from some countries to pass.
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US TSY FUTURES: FV Blocked
Latest block trade lodged at 09:11:12 London/04:11:12 NY:
- FVH6 2,650 lots blocked at 109-11, looks like a seller. DV01 ~$114K.
ECB: Negotiated Wage Growth Still Below 3% By End-26, Another Upward Revision
The ECB’s forward looking wage tracker continues to indicate negotiated wage growth of just below 3% by the end of this year. Note that at last week’s press conference, President Lagarde stressed that “the contribution to overall wage growth from payments over and above the negotiated wage component remains uncertain” – this followed the stronger-than-expected compensation per employee reading in Q4 2025.
- The wage tracker excluding one-off payments was 2.693% in the February updated, up from 2.681% in December.
- Note that upward revisions have become common in this series. For example, the Q2 2026 reading of 2.650% was 2.582% in December and 2.489% in October.
- From the ECB’s press release: “The rise in the wage path over the course of the year is related to the dissipation of the mechanical downward effect of large one-off payments that were made in 2024 but not in 2025. These mechanical effects are expected to virtually disappear over the course of 2026, and the wage trackers with one-off payments (smoothed and unsmoothed) and without one-off payments are expected to converge as such payments become less relevant. The ECB wage tracker also suggests that there is less dispersion in negotiated wage pressures across the different euro area countries in 2026 than in previous years.”
- “As new agreements are being signed and coverage of contracts reaching beyond 2026 is gradually increasing, the forward-looking horizon of the wage tracker will be extended to the first quarter of 2027 in the July 2026 data release.”
FOREX: FX OPTION EXPIRY - Large Expiry in the EUR Friday
Of note:
EURUSD ~1bn at 1.1900.
USDJPY 1.67bn at 154.00 (thu).
USDCNY 1.1bn at 6.9000 (thu).
EURUSD 11.18bn between 1.1850/1.1955 (fri).
USDCNY 1.2bn at 6.9000 (fri).
- EURUSD: 1.1825 (1.52bn), 1.1850 (792mln), 1.1870 (451mln), 1.1900 (934mln), 1.1950 (371mln), 1.2000 (2.17bn).
- GBPUSD: 1.3640 (362mln).
- USDCAD: 1.3500 (282mln), 1.3540 (300mln).
- USDCNY: 6.9000 (500mln), 6.9200 (678mln).
