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ING’s Global Head of Macro Carsten Brzeski argues that the European Central Bank will keep rates unchanged at its 19 March meeting but adopt a more hawkish tone as the war in the Middle East and higher Oil prices revive memories of the 2022 energy shock.

Here is what you need to know on Thursday, March 12:

Rabobank’s RaboResearch Global Economics & Markets team highlights rising geopolitical risks around Iran and Hormuz as Brent Oil trades close to $100.

DBS Group Research’s Philip Wee warns that caution is warranted on USD/JPY as the pair trades near the 159–160 resistance zone after Operation Epic Fury. He expects the Bank of Japan to deliver a hawkish hold on March 19, distinguishing temporary supply-led inflation from demand-pull pressures.

OCBC strategists Sim Moh Siong and Christopher Wong argue that higher nominal ECB rate expectations are failing to support the Euro as Oil-driven stagflation erodes the euro area’s real return and worsens its external balance.

West Texas Intermediate (WTI) Crude Oil prices trim a part of strong intraday gains to the $94.75-$94.80 region on Thursday, though the downside seems limited amid supply disruption fears.

Danske Research Team reports that ECB officials are turning more hawkish as energy-driven inflation risks and potential fiscal easing in the Euro area build.

USD/INR moves little as the Indian Rupee (INR) pressure from hedging demand and foreign outflows offsets improved sentiment, boosted by easing oil prices. Oil prices decline after reports that the International Energy Agency (IEA) may release record oil reserves to stabilize markets.

MUFG’s Senior Currency Analyst Lloyd Chan highlights that Brent Oil has risen above US$90/bbl as supply risks from Iraq and the Strait of Hormuz overshadow the International Energy Agency’s record 400 million barrel emergency reserve release.

The USD/CAD pair trades in negative territory around 1.3600 during the early European trading hours on Thursday. A rise in crude oil prices provides some support to the commodity-linked Canadian Dollar (CAD). The US weekly Initial Jobless Claims report will be released later on Thursday.