A look at the day ahead in European and global markets from Rae

Wee

Perhaps it's time investors abandon their hopes of a quick end

to the U.S.-Israel war on Iran and price in a prolonged

conflict.

U.S. President Donald Trump's latest threat to hit Iran hard

over moves to stop the flow of energy supplies through the

Strait of Hormuz does little to suggest that the war is, as he

previously said, "very complete, pretty ​much".

And with the U.S. and Israel continuing to trade air strikes

with Iran's military across the Middle East, it's difficult to

fathom how things could soon blow over.

Oil prices pared early gains on Wednesday after the Wall Street

Journal reported that the International Energy Agency had

proposed the largest release of oil reserves in its history to

bring down crude prices, though moves were choppy.

That provided some relief to battered global stocks, with

indexes in Asia staging a rebound while U.S. futures pushed

higher. European futures were mixed.

Still, investors remained on edge as they struggled to gauge the

impact of surging energy prices on global growth and inflation,

with conflicting messaging from Washington, in particular,

adding to the confusion.

And then there was U.S. Secretary of Energy Chris Wright,

who posted on X on Tuesday that the U.S. Navy had successfully

escorted an oil tanker through the Strait of Hormuz, only to

delete the post a little while later.

"A video clip was deleted from Secretary Wright's official X

account after it was determined to be incorrectly captioned by

Department of Energy staff," a department spokesperson said.

Elsewhere in markets, the Australian dollar was the big

mover in Asia, as a growing number of economists tipped the

Reserve Bank of Australia to raise interest rates next week.

A host of central bank meetings, including the Federal Reserve,

the European Central Bank, the Bank of England and the Bank of

Japan, are due next week, with expectations that policymakers

will strike a cautious tone or turn more hawkish given the risks

of resurgent inflation should the spike in energy prices be

sustained.

U.S. inflation data for February is, meanwhile, due later in

the day.

Key developments that could influence markets on Wednesday:

- U.S. inflation data (February)

- Fed's Bowman speaks

- ECB's Schnabel, Guindos speak

(Editing by Kate Mayberry)