Central bankers sound inflation alarm

A look at the day ahead in European and global markets

Morning Bid Europe Morning Bid Europe A look at the day ahead in European and global markets By Ankur Banerjee, Asia Finance & Markets Breaking News Correspondent   Data refreshes every time you open this email. For more European market news, click here. Please send any feedback to morningbid@thomsonreuters.com. As the U.S. and Israel's war with Iran intensifies after major attacks on energy infrastructure, central bank meetings have become the stage for policymakers to unite in flagging the prospect of accelerating inflation due to soaring energy prices. The Bank of Japan joined the U.S. Federal Reserve and Bank of Canada in keeping interest rates steady but highlighted mounting price pressure that could accompany a prolonged war that has upended global markets this month. Today's Market News Oil rises after Iran strikes Middle East energy facilities Stocks slump on worsening war in Middle East; frail yen in focus Bank of England to sit tight as Middle East conflict turns up inflation heat ECB to talk tough as Iran war raises inflation fears Trading Day: Hello inflation, goodbye 2026 Fed cut Policymakers walk tightrope QatarEnergy's liquefied natural gas (LNG) production facilities, amid the U.S.-Israeli conflict with Iran, in Ras Laffan Industrial City, Qatar March 2, 2026. REUTERS/Stringer With markets expecting the European Central Bank and Bank of England to likewise hold rates later in the day, the focus will again be on comments from officials who will likely talk tough on inflation. Policymakers are walking a tightrope as they look to rein in stubborn price pressure without derailing growth, just as they did in 2022 when Russia's invasion of Ukraine spurred a commodities-led spike in inflation rates. That stagflationary dilemma has sapped investor sentiment as markets come to terms with another conflict that shows no sign of easing. Graphics are produced by Reuters Traders put on risk-off hats And so, traders have put on their risk-off hats, sold stocks, pushed expectations of U.S. rate cuts further back and bought U.S. dollars. Oil prices are firmly above $100 a barrel while natural gas is up more than 6%. That has left the Japanese yen just below 160 to the dollar which traders expect could trigger intervention, especially after strong comments from Japan's finance minister on Thursday. Yen watchers might feel a sense of deja vu as the prospect of an intervention raises its head every few months. The spotlight is firmly on BOJ governor as investors weigh how he will frame the balance between the need to support a shock-hit economy and avoid being behind the curve on inflation. That may dictate where yen ends up. After that, it's over to the ECB and BoE.   Key developments that could influence markets on Thursday: ECB policy meeting BoE policy meeting UK wage data   Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.   Sponsors are not involved in the creation of newsletters or other Reuters news content. Advertise in this newsletter or on Reuters' website   Morning Bid is sent every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. Want to stop receiving this email? Unsubscribe here. To manage which newsletters you're signed up for, click here. This email includes limited tracking for Reuters to understand whether you’ve engaged with its contents. For more information on how we process your personal information and your rights, please see our Privacy Statement. Terms & Conditions   © 2026 Thomson Reuters. All rights reserved. 3 Times Square, New York, NY 10036