Just hit the daily limit! Missile attack causes explosion! Trump's latest statement

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Expectations have completely changed!

On the morning of March 19, the main futures contract for liquefied petroleum gas (LPG) hit the daily limit, rising 10.99% to 6,392 yuan/ton. All-line surges occurred in low-sulfur fuel oil, crude oil, methanol, and other commodities. The A-shares coal sector strengthened early trading, with Shaanxi Black Cat hitting the daily limit, and Yao Energy, Shaanxi Coal Industry, Antai Group, JinKong Coal, and Yunmei Energy also rising.

In the news, Qatar Energy recently announced that multiple liquefied natural gas facilities under its management were attacked by missiles early Thursday, causing large fires and severe damage. Emergency response teams have been deployed immediately to control the damage, with no reports of casualties so far.

Subsequently, U.S. President Trump posted that the U.S. was unaware of Israel’s attack on Iranian facilities. Israel will no longer take any action against the extremely important and valuable South Pars oil and gas field.

On March 18, Iran’s Islamic Revolutionary Guard Corps issued an emergency warning, declaring that oil facilities in Saudi Arabia, the UAE, and Qatar have become “legitimate targets” and will be struck within hours, urging residents in the affected areas to evacuate.

Shockwaves are coming

The situation in the Middle East seems to be developing toward an uncontrollable direction. Qatar Energy again stated that several of its liquefied natural gas facilities were attacked by missiles early Thursday, causing large fires and serious damage. This incident immediately triggered a surge in related futures.

More importantly, Trump and Qatar appear to be unaware of Israel’s bombing of Iranian petrochemical facilities.

Trump posted that, out of anger over events in the Middle East, Israel launched a fierce attack on Iran’s main facilities at South Pars. Only a small part of the gas field was hit. The U.S. was not aware of this specific attack, and Qatar was not involved or informed beforehand. Unfortunately, Iran was unaware of this situation and the basic facts related to the South Pars attack, and it unjustly and without cause attacked parts of Qatar’s liquefied natural gas facilities.

Trump stated that unless Iran foolishly decides to attack the very innocent Qatar in this incident, Israel will no longer launch any attacks on this extremely important and valuable South Pars gas field—if Iran does so, then the U.S., whether with Israel’s help or approval, will destroy the entire South Pars gas field with unprecedented force and scale. “Because this will have long-term impacts on Iran’s future, I do not want to authorize such violence and destruction, but if Qatar’s liquefied natural gas facilities are attacked again, I will not hesitate to do so.”

As a result, major global markets fell sharply early in the session, but futures related to energy chemicals and related stocks still surged significantly. Hong Kong oil stocks fluctuated higher, with CNOOC International rising over 8%, China National Offshore Oil Corporation (CNOOC) up over 5%, China Petroleum & Chemical Corporation (Sinopec) up over 2%, CNOOC’s offshore service, and Kunlun Energy also gaining. The A-share petrochemical and coal sectors also performed well.

Expectations are changing

Previously, the market held a “short-term bias” regarding the duration of the conflict, and the response was relatively muted. During this period, global markets’ declines were also relatively controlled. However, as the conflict deepens, these expectations are now shifting.

UBS strategist Andrew Garthwaite said that global equities may continue to consolidate in the short term, as markets are dealing with high uncertainty and a wide range of potential macroeconomic outcomes.

UBS set a 2026 target for the MSCI Global Market Index at 1,100 points, slightly below the previous estimate of 1,130. Compared to the current ACWI index level of 1,015.60, this indicates a modest upside potential, but with ongoing volatility.

UBS emphasized that the dispersion of potential outcomes is particularly large. In a more optimistic scenario, a quick resolution of Middle East conflicts combined with stronger productivity growth driven by AI could push the fair value of the MSCI AC World Index to 1,280. Conversely, if the conflict persists for three months or longer without productivity gains, the fair value could fall to 700, representing about a 30% decline from current levels.

The strategist wrote in a report that even if the conflict is resolved quickly, we may be underestimating the risks of supply chain disruptions (such as sulfuric acid, aviation fuel, and LPG in India). Several recent adverse factors are causing the market to oscillate within a range. Risk and sentiment indicators remain overly optimistic; UBS’s risk appetite indicator is at the 15th percentile of its 10-year range, and systemic and autonomous investors’ positions are generally neutral rather than capitulative.

Meanwhile, defensive sectors such as consumer staples and pharmaceuticals have not significantly outperformed the broader market, indicating that the market has not fully priced in the possibility of an economic slowdown. Commodity markets also send mixed signals: oil futures point to a temporary interruption, but bond yields have risen sharply, suggesting investors may be underestimating inflation risks.

The Reserve Bank of Australia warned on Thursday that the Middle East conflict could trigger serious international shocks, but if a significant economic downturn occurs, Australian banks are well-positioned to support the economy. In its semi-annual Financial Stability Review, the RBA listed several global vulnerabilities, including potential financial market crashes, cyberattacks, and the spread of unconventional policies. This indicates that the risks of significant adverse shocks to the domestic economy over the past few weeks have increased. The RBA stated, “The Middle East conflict could trigger larger shocks, disrupting the global economy, especially if supply disruptions in oil and other commodities persist… Given the significant increase in leverage and concentration in key global asset markets in a low-risk premium environment in recent years, there is an increased risk of disorderly repricing of assets in the event of further adverse developments.” The RBA also noted that if productivity does not improve as expected, investments related to AI could face substantial sell-offs.