(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

March 30 -

What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Markets remain unconvinced that a hasty end to the Middle East

war is imminent, with oil prices surging again on Monday and

global stocks getting off to a rocky start.

Any hopes of near-term de-escalation were wiped away over the

weekend as Iran-affiliated Houthi forces in Yemen joined the

conflict and President Trump suggested U.S. troops could take

Kharg Island, Iran's main oil export hub. The signals out of

Washington remain mixed, however, with Trump continuing to talk

up the prospects for a peace deal with Tehran.

I'll get into that and more below.

But first, listen to today's Morning Bid podcast, where I

analyse crude's upswing and preview a key release due today that

could give an early read on how the energy shock is affecting

prices.

Subscribe to hear Reuters journalists discuss the biggest

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CRUDE ESCALATION

Brent was headed for its biggest ever monthly rise on Monday as

it crossed $116 per barrel, while U.S. crude rose to more than

$102 per barrel. Both have since fallen back slightly, but

remain elevated. The moves follow sharp upticks for the

benchmarks last Friday.

More worrying for energy consumers - and central bankers -

is that 3-month Brent futures are also now above $100 per

barrel, indicating growing pessimism about a near-term end to

the war and the growing risk of a persistent inflationary bump.

Taking their cue from the renewed rise in crude prices, Asian

stocks tumbled on Monday. Japan's Nikkei fell by 2.8%, bringing

its March losses to nearly 13%, while South Korea's KOSPI index

fell by nearly 3%, down almost 9% this month.

Nevertheless, European shares rose slightly in early trading and

Wall Street futures were up before the bell, perhaps soothed by

Trump's comments on apparent talks with Tehran.

Meantime, the dollar held firm as it stayed on track for its

biggest monthly gain since last July. The greenback's strength

helped push the yen past the 160-per-dollar level - typically

seen as a red line for intervention. Japanese currency official

Atsushi Mimura said on Monday that "decisive measures" may be

called for to stem the yen's fall.

As the energy shock continues, G7 finance ministers, foreign

ministers and central bankers are due to meet virtually today to

assess what they can do to alleviate its impacts.

Traders may also get some timely Federal Reserve commentary

on the unfolding situation as both Fed Chair Jerome Powell and

New York Fed President John Williams are set to speak today.

And we'll also get a look at the energy shock's initial

pass-through into European inflation with the release of German

CPI figures for March.

Meantime, Pakistan, which has emerged as a crucial intermediary

in the Middle East conflict, has said it is preparing to host

"meaningful talks" between Tehran and Washington - though it's

unclear whether either side has agreed to attend.

With more U.S. troops deploying to the region and reports of

ground operations swirling, the crisis seems to be at an

important juncture. Whether all this noise ultimately leads to

escalation or de-escalation remains to be seen.

Chart of the day

U.S. gas pump prices jumped by a third in March as the Iran

attacks and related energy shock unfolded. It's one of the

largest monthly rises on record. Average regular unleaded prices

are now hovering just under $4 per gallon.

Today's events to watch

* U.S. Dallas Fed business survey (10:30 AM EDT)

* U.S. Fed Chair Jerome Powell and New York Fed President

John Williams both speak

* G7 finance, energy ministers and central bankers hold a

virtual meeting

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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.