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MBS basis outperformed the broader market, the US Treasury yield curve showed a clear bull flattening, and US stock futures opened higher. Despite WTI crude oil prices breaking above the $100 mark, bond and equity volatility remained at relatively high levels, marking the end of a terrible first quarter on Tuesday.Market trends are mainly influenced by the ongoing conflict between the US, Israel, and Iran, which began on February 28 and has now entered its second month. Trump warned on social media that if no agreement is reached in the short term and the Strait of Hormuz is not immediately reopened, Iran’s power plants, oil wells, and Kharg Island will be destroyed.Overseas data reflect the impact of war shocks and soaring oil prices: in the Eurozone, the Economic Sentiment Index fell to 96.6 in March from 98.2, while the Consumer Inflation Expectations Index jumped to 43.4 from 26.2; Germany’s March preliminary CPI rose to 2.8% year-on-year, significantly higher than February’s 2.0%.The US data calendar is becoming busier this week, with the March non-farm payroll report set to be released on Friday, becoming the market’s focus. On Tuesday, Federal Reserve Chair Powell will participate in an economics classroom discussion at Harvard University, and his comments on the economic outlook and interest rate path are highly anticipated.As of Tuesday morning, the 10-year US Treasury yield stood at 4.378% and the 5-year at 4.012%. Volatility indicators show that the market remains cautious. WTI crude oil rose to $100.93 per barrel, while the US Dollar Index and gold moved higher simultaneously, with geopolitical risks and growth concerns continuing to be intertwined.

Optimism over biofuels supports CBOT soybeans in rising, as the agricultural product market collectively holds its breath ahead of key data, with attention focused on the upcoming planting intentions and inventory report.

According to a report from Golden Ten Data on March 30, Morgan Stanley strategists stated that due to the energy price shock triggered by the Iran war, the US dollar may rise further in the short term. However, they pointed out that once the market shifts focus from pricing in the inflationary impact of rising energy prices to the negative impact on economic growth, especially as defense spending increases, the US dollar may turn weaker. They suggest that investors should sell during a USD rebound rather than buy on a pullback.