Major drop of 2,500 points during the session! Trump makes the latest statement! Iran: Opposes U.S. negotiation conditions!

On the morning of March 30, the Asia-Pacific markets plummeted significantly. As of the time of reporting by Securities China, the Nikkei 225 index dropped by more than 2500 points, a decline of 4.80%; the South Korean KOSPI index fell nearly 4%, and the MSCI Asia-Pacific index decreased by over 2%.

Market analysts pointed out that the tensions in Iran did not ease over the weekend, and oil prices continued to soar on Monday, which is bad news for Japan and South Korea as they heavily depend on energy from the Middle East.

According to Xinhua News Agency, U.S. President Trump stated during an interview with British media on the 29th that he wanted to “take” Iranian oil and did not rule out occupying the oil export hub of Khark Island in Iran.

In an interview with the Financial Times, Trump expressed his desire to “take oil” from Iran, similar to what was done “in Venezuela.” However, Trump also mentioned that a ceasefire agreement with Iran could be reached “soon.” Trump claimed that indirect negotiations between the U.S. and Iran via the “intermediary” Pakistan were “progressing well.” But when asked if a ceasefire agreement could be reached in the coming days and if the Strait of Hormuz could be reopened, Trump did not disclose specific details. Trump stated, “We have about 3,000 targets left, we have bombed 13,000 targets, and there are a few thousand targets to hit. An agreement could be reached very soon.”

Additionally, according to CCTV News, on March 30, a petrochemical plant in Tabriz, East Azerbaijan Province, Iran, was attacked.

Moreover, several Iranian government officials voiced on March 29 that while the U.S. proposed negotiations, it continued to issue military threats, and Iran’s armed forces were prepared to respond to any possible military actions. If the U.S. invades on the ground, Iran will “retaliate decisively.”

Japanese and South Korean Stock Markets Plummet

On the morning of March 30, the stock markets in Japan and South Korea sharply declined, with the KOSPI index and the Nikkei 225 index each experiencing intraday drops of over 5%. As of the time of reporting, the Nikkei 225 index was down 4.80%, and the KOSPI index was down 3.97%. In terms of individual stocks, SoftBank Group fell nearly 8%, Hitachi dropped nearly 6%, SK Hynix declined over 5%, Toyota Motors fell nearly 5%, and Samsung Electronics dropped nearly 4%.

Currently, investors are preparing for a protracted conflict in the Gulf, which has led to record monthly increases in oil prices and poses inflationary and recessionary risks to most parts of the world.

Madison Cartwright, senior geopolitical analyst at the Commonwealth Bank of Australia, stated: “Iran controls the Strait of Hormuz and has the capacity to disrupt global energy and food markets, and it has sustained missile and drone capabilities, which gives it little incentive to make concessions, forcing the U.S. to escalate actions. We expect the Iran war to last at least until June, and the risk of an extended conflict is increasing.”

Foreign media pointed out that the blockade of the Strait of Hormuz has led to skyrocketing prices for oil, natural gas, fertilizers, plastics, and aluminum, with prices for aviation and shipping fuel also rising. Prices for food, medicine, and petrochemical products are also expected to increase.

Bruce Kasman, chief economist at J.P. Morgan’s Global Research Division, warned: “The longer the Strait of Hormuz is closed, the more severe the depletion of buffer stocks will be, which could trigger a sharp increase in crude oil, natural gas, and other commodity prices. If the Strait remains closed for another month, it will lead to oil prices climbing to $150 per barrel and constrain supplies for industrial energy consumers.”

The inflation threat has prompted investors to raise interest rate expectations globally. The market currently expects the Federal Reserve to tighten policy by 12 basis points this year, whereas a month ago, it anticipated a 50 basis point rate cut.

Federal Reserve Chairman Powell will have the opportunity to share his views later on Monday at an event, and influential New York Federal Reserve Bank President John Williams will also speak.

This week, data on U.S. retail sales, manufacturing, and employment will provide the latest information on economic conditions. After a surprising decrease of 92,000 jobs in February, the employment number in March is expected to increase by 55,000, keeping the unemployment rate at 4.4%.

In the European Union, data released on Tuesday is expected to show that the annual inflation rate for March will jump from 1.9% in February to 2.7%, although core prices should be more stable.

The impending energy shock, combined with the pressure on fiscal budgets from rising borrowing costs and the need to increase defense spending, has heavily impacted the sovereign bond market. So far this month, the 10-year U.S. Treasury yield has risen by about 47 basis points to 4.428%, while the 2-year Treasury yield has increased by 54 basis points.

Iranian Petrochemical Plant Attacked

According to CCTV News, on March 30, the head of the emergency department in East Azerbaijan Province, Iran, reported that a petrochemical plant in Tabriz was attacked that day. The official stated that the situation at the scene has been controlled, and there have been no leaks of toxic substances.

The Israel Defense Forces announced on the evening of March 29 that earlier that day, dozens of Israeli Air Force fighter jets carried out another round of airstrikes on infrastructure in Tehran, the capital of Iran.

The IDF stated that in this round of airstrikes, the focus was to further damage Iran’s weapons production capabilities, with over 120 munitions dropped on facilities used for weapon research and production, and the IDF also targeted facilities used for the storage and launch of ballistic missiles as well as several air defense facilities. Israel’s attacks on Tehran’s military industry are ongoing.

That evening, Major General Sayyed Majid Moosavi, commander of the Aerospace Force of the Iranian Islamic Revolutionary Guard Corps, stated on social media that response actions to the attacks on Iranian infrastructure are still ongoing. Moosavi indicated that related actions involve the Neot Hovav industrial area in Israel, as well as a refinery, two steel mills, and two large aluminum facilities. He stated that the strikes are continuing.

Several Iranian government officials expressed on March 29 that while the U.S. proposed negotiations, it continued to issue military threats, and Iran’s armed forces were prepared to respond to any possible military actions. If the U.S. invades on the ground, Iran will “retaliate decisively.”

Iranian Foreign Ministry spokesman Baghaei stated that the suggestions submitted to Iran through intermediaries by the U.S. are extremely extreme and unreasonable. These suggestions involve Iran’s fundamental rights and do not reflect goodwill or a serious diplomatic attitude. He also stated that Iran will use all means to prevent further attacks. Iran’s military actions will not target Arab countries, only American military bases and assets used against Iran.

Iranian Speaker of Parliament Ghalibaf stated that the U.S. is sending negotiation signals publicly while secretly planning a ground attack and has proposed a so-called “15-point plan” to end hostilities, attempting to achieve goals that it could not accomplish in war. Ghalibaf also stated that the conflict is at its most critical moment. U.S. aircraft and aircraft carrier groups have suffered huge losses, and Israel has also been hit; these strikes are “precise and innovative.” Ghalibaf emphasized that the U.S. seeks Iran’s surrender, and Iran will never accept humiliation.

Iranian Army spokesman Akraminia stated that the core issue between the U.S. and Iran is not the nuclear issue, but Iran’s sovereignty and independence.

Additionally, Iranian Navy commander Irani stated that Iran is closely monitoring the position and movements of the U.S. aircraft carrier Lincoln strike group, and once the Lincoln strike group enters range, Iran will launch missiles from the coast to strike it.

In response to recent U.S. threats of ground operations against Iran, a spokesman for the Central Headquarters of the Iranian Armed Forces, Khatam al-Anbiya, stated on the 29th, “If the relevant threats are implemented, the Iranian armed forces will respond decisively.”

(Source: Securities China)