{"id":239861,"date":"2026-03-05T13:06:47","date_gmt":"2026-03-05T18:06:47","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=239861"},"modified":"2026-03-05T16:31:08","modified_gmt":"2026-03-05T21:31:08","slug":"inflation-risk-rises-as-crude-oil-jumps-to-14-month-high","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/ibkr-economic-landscape\/inflation-risk-rises-as-crude-oil-jumps-to-14-month-high\/","title":{"rendered":"Inflation Risk Rises as Crude Oil Jumps to 14-Month High: March 5, 2026"},"content":{"rendered":"\n<p>Crude prices jumped to a 14-month high after Tehran claimed a missile attack on a US oil tanker. The heavier geopolitical premium is hurting markets today because Wall Street is increasingly assessing if the risks of potentially stronger inflation may deter the Fed from cutting as promptly as equity investors would like. Indeed, fixed-income observers now expect the central bank to deliver its next reduction in the third quarter, at either the July or September meetings, representing a shift from the past few weeks in which there were elevated odds of a June trim. But it\u2019s not just the war that\u2019s sending yields north, as better-than-anticipated initial claims, productivity and Challenger layoff reports bolstered optimism regarding the health of the cycle. Equities are getting creamed, however, with all sectors lower minus tech and energy. The commodity and cryptocurrency complexes are also suffering losses, with the exception of WTI and natural gas, against the backdrop of an advancing greenback, a lack of speculative enthusiasm and projections signaling a long road before monetary policy accommodation arrives. Volatility protection instruments are catching bids as participants hedge portfolios and so are forecast contracts.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1008\" height=\"733\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-17.png\" alt=\"Historical crude oil prices\" class=\"wp-image-239862 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-17.png 1008w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-17-700x509.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-17-300x218.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-17-768x558.png 768w\" data-sizes=\"(max-width: 1008px) 100vw, 1008px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1008px; aspect-ratio: 1008\/733;\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-labor-market-stays-healthy\"><strong>Labor Market Stays Healthy<\/strong><\/h3>\n\n\n\n<p>Unemployment claims remained well anchored in the past two weeks and continued to signal reduced layoff appetites amongst employers. Initial applications were unchanged at 213k for the week ended Feb. 28 and below the 215k estimate. Continuing filings rose to 1.868 million during the week culminating on Feb. 21, ahead of the expected 1.85 million and the prior period\u2019s 1.822 million. Four-week moving averages were relatively stable at 215.75k and 1.852 million, shifting from 220.5k and 1.845 million.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1008\" height=\"733\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-18.png\" alt=\"Historical unemployment claims \" class=\"wp-image-239863 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-18.png 1008w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-18-700x509.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-18-300x218.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-18-768x558.png 768w\" data-sizes=\"(max-width: 1008px) 100vw, 1008px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1008px; aspect-ratio: 1008\/733;\" \/><\/figure>\n\n\n\n<p>A separate February release from Challenger, Gray and Christmas, meanwhile, pointed to more than a 50% month-over-month (m\/m) reduction in job cut announcements amidst a gain of over 100% m\/m in hiring intentions. Additionally, workforce trimming anticipations were down 72% year over year (y\/y).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-productivity-expands-for-third-consecutive-quarter\"><strong>Productivity Expands for Third Consecutive Quarter<\/strong><\/h3>\n\n\n\n<p>Productivity during the final three months of 2025 expanded, marking three consecutive quarters of improvement, although growth in the most recent period slowed. The 2.8% quarter-over-quarter (q\/q) seasonally adjusted annualized rate (SAAR) beat the 1.3% estimate but was below the preceding period\u2019s sharp 5.2% progress. Additionally, unit labor costs, or what employers pay employees to produce a single unit of output, rose 2.8% q\/q on a SAAR basis, above the 2% expectation and the prior print\u2019s -1.8% result.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1008\" height=\"733\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-19.png\" alt=\"productivity climbs for third consecutive quarter\" class=\"wp-image-239864 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-19.png 1008w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-19-700x509.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-19-300x218.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/03\/image-19-768x558.png 768w\" data-sizes=\"(max-width: 1008px) 100vw, 1008px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1008px; aspect-ratio: 1008\/733;\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-fed-s-balancing-act-becomes-more-challenging\"><strong>The Fed\u2019s Balancing Act Becomes More Challenging<\/strong><\/h3>\n\n\n\n<p>This week\u2019s economic data has been robust and together with the war in Iran reaching its sixth day, rates have jumped substantially. The developments are top of mind as they relate to the Fed\u2019s dual mandate because they weaken the argument for imminent Fed cuts to bolster labor conditions. The Middle East conflict also raises the risk of oil prices driving inflationary pressures. With that in mind, tomorrow\u2019s Jobs Friday and retail sales figures will be significant, because if they come in strong against the backdrop of a Middle East conflict that continues intensifying, they could cause continued pain in markets. Another key consideration is that the first look at nonfarm payrolls tends to be stronger than ensuing revisions, and that lays the foundation for a potential beat in the consensus expectation of 59k, which is a low bar in my view, and less than half of January\u2019s 130k. The numbers arrive during a week that featured beats on ADP-employment, ISM-manufacturing and services, initial unemployment claims, and Challenger, which collectively are strengthening confidence that a reacceleration could be on the way.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-international-roundup\"><strong>International Roundup<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-january-retailing-in-europe-weakened-relative-to-december\"><strong>January Retailing in Europe Weakened Relative to December<\/strong><\/h3>\n\n\n\n<p>Retail sales in the euro area dropped 0.1% m\/m in January, which missed the economist consensus expectation for activity to ascend 0.3% following the 0.2% gain in the preceding print. When compared to December, euro area consumers spent 0.3% more on food, drinks and tobacco. Sales of non-food items excluding automobile fuel also strengthened, climbing 0.2%. Spending dropped on automobile fuel at specialized stores, however, heading south by 1%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-and-construction-industry-continued-to-contract-last-month\"><strong>And Construction Industry Continued to Contract Last Month<\/strong><\/h3>\n\n\n\n<p>Construction in the eurozone continued to weaken in February but the rate of decline eased slightly, according to the HCOB Eurozone Construction PMI. The gauge climbed from 45.3 in January to 46 in February, inching closer to the contraction-expansion threshold of 50. Companies in Italy reported growth but results were negative in Germany and France. More broadly, input cost inflation accelerated but rates charged by subcontractors climbed at a slower pace than in January.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-but-uk-construction-pmi-falls\"><strong>But UK Construction PMI Falls<\/strong><\/h3>\n\n\n\n<p>The S&amp;P Global UK Construction PMI for February depicted an industry stricken by weakening activity for 14 consecutive months. The latest reading of 44.5 is down considerably from January\u2019s seven-month high of 46.4. Higher input costs, an accelerated decline in new work and disappointing numbers of construction starts all weighed on results with the residential segment show the worst performance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-australia-trade-surplus-falls\"><strong>Australia Trade Surplus Falls<\/strong><\/h3>\n\n\n\n<p>Australia\u2019s goods trade surplus unexpectedly fell from $3.37 billion in December to $2.63 in the subsequent month, missing the economist consensus estimate of $3.78 billion. Exports slipped 0.9% m\/m after climbing 0.9% in December. January imports, meanwhile, were 0.8% higher than in the preceding period, a reversal from the 1.8% m\/m December decline.<\/p>\n\n\n\n<p>Exports of non-monetary gold were up 9% m\/m, but general merchandise shipped abroad sank 2.3%. Within the merchandise category, rural goods, which are typically agriculture products, declined 5.2%, primarily a result of the meat and meat preparations category and the other rural goods group falling 9.5% and 10.5%, respectively. Exports of non-rural goods also dragged down results. The category\u2019s 1.7% m\/m contraction resulted largely from the other non-rural goods category, which includes sugar and beverages, tanking 20.2% and coal, coke and briquettes descending 4.4%.<\/p>\n\n\n\n<p>Among imports, non-monetary gold was up 46.8% m\/m and capital goods climbed 5.1% with the latter category experiencing a 50.4% jump in automatic data processing equipment. Civil aircraft and confidential items were also strong, increasing 47.8%. Conversely, Australians trimmed their purchases of intermediate and other merchandise goods and consumptions goods from foreign providers by 4.5% and 3.7%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-singapore-sales-fall-relative-to-december\"><strong>Singapore Sales Fall Relative to December<\/strong><\/h3>\n\n\n\n<p>Singapore retail sales in January were 6.1% higher than during the final month of 2025 but were still down 0. 4% from the year-ago period, according to the country\u2019s Department of Statistics. \u00a0The m\/m result was a considerable reversal from the 2.7% slip in December. The y\/y metric, however, weakened from December\u2019s 2.5% gain. The following categories and the extent of their sales changes experienced the strongest growth m\/m:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Watches and jewelry, 20.7%<\/li>\n\n\n\n<li>Food and alcohol, 12.8%<\/li>\n\n\n\n<li>Cosmetics, toiletries and medical goods, 8.1%<\/li>\n\n\n\n<li>Supermarkets and hypermarkets, 7.7%<\/li>\n\n\n\n<li>Wearing apparel and footwear, 7.6%<\/li>\n\n\n\n<li>Department stores, 4.4%<\/li>\n\n\n\n<li>Petrol service stations, 3.8%<\/li>\n\n\n\n<li>Furniture and household equipment, 2.3%<\/li>\n<\/ul>\n\n\n\n<p>Conversely, the computer and telecommunications equipment group and the other classification sank 2.4% and 1%.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crude prices jumped to a 14-month high after Tehran claimed a missile attack on a US oil tanker.<\/p>\n","protected":false},"author":903,"featured_media":223180,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[4,5,12711,18,6,8,9,26,3],"tags":[1925,40],"contributors-categories":[13760],"class_list":{"0":"post-239861","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asia","8":"category-europe-middle-east-africa","9":"category-ibkr-economic-landscape","10":"category-macro","11":"category-north-america","12":"category-region","13":"category-securities","14":"category-text-articles","15":"category-traders-insight","16":"tag-iran","17":"tag-oil","18":"contributors-categories-ibkr-macroeconomics"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium 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