US equities staged a broad recovery on Monday. The S&P 500 rose 1.01% to 6,699, the Nasdaq gained 1.23%, and the Dow added 0.83% to 46,946. VIX fell from 27 to 25.17. The catalyst was Treasury Secretary Bessent announcing that the US would allow select Iranian oil tankers to transit the Strait of Hormuz and is assembling a multinational escort coalition. WTI crude fell approximately 5% to $93; Brent initially pulled back toward $98 but has since moved back above the $100 level.

This is sentiment repair, not structural resolution. The Strait of Hormuz has not formally resumed normal operations. Iran has not fundamentally changed its posture. The supply chain risk has not been removed — it has been repriced as "de-escalation possible." Global inflation expectations remain anchored to elevated energy costs. The Fed, ECB, and Bank of England all meet this week, each facing the same constraint: growth is slowing, but inflation has re-emerged. The rate-cut window is effectively closed.

Monday's rally was driven by less-bad news, not good news. That distinction matters. Bessent's announcement reduced the pricing of the worst-case scenario, but did not alter the direction of the macro transmission chain: energy shock → sticky inflation → delayed rate cuts. That chain remains intact.

Nvidia's GTC conference provided an independent tailwind for tech and AI-related names, with chipmakers leading the session. This creates a separate upside narrative, but it does not change the macro backdrop. With energy costs still near historical highs, corporate margins and consumer confidence remain under sustained pressure. The FOMC meeting on March 18-19 will be the critical test of where policy stands.

China's January-February data released Monday came in ahead of forecasts across the board. Industrial output rose 6.3% year-on-year — the fastest since September — beating the Reuters consensus of 5.0%. Retail sales grew 2.8%, above the expected 2.5%. Fixed-asset investment expanded 1.8%, against expectations for a 2.1% contraction. Exports also beat forecasts, driven by surging AI-related technology demand.

But structural weakness persists. The unemployment rate edged up to 5.3%, its highest since August. Passenger vehicle sales tumbled 26% year-on-year. Tourism spending per trip dipped slightly, suggesting households remain cautious beneath the headline numbers. Critically, this data predates the full impact of the Middle East conflict. Beijing has set its 2026 growth target at 4.5-5%, its most modest since 1991.

Today's RBA decision (March 17, AEDT) is the most important local signal of the week. Markets are pricing a 66% probability of a 25bp hike to 4.10% — a dramatic shift from just weeks ago. The primary driver is imported inflation: Australian CPI is running near 3.8%, and analysts warn it could breach 4.2% by mid-year as oil prices and living costs escalate.

The AUD is testing the 0.70 level (last near 0.7010), pressured by a stronger dollar and global risk uncertainty. As a net energy exporter, Australia benefits from elevated LNG and coal revenues — which has provided partial insulation for the currency. If the RBA hikes today, it will confirm that Australia has entered the same phase as other developed economies: growth under pressure, but central banks unable to pivot.