It was a week that began with cautious hope and ended in something close to alarm. Global share markets sold off sharply, bond yields surged, and oil climbed relentlessly as the war between the United States, Israel and Iran escalated well beyond what most investors had been pricing in just days earlier.

Brent crude, which started the week around $101 a barrel, finished above $112 after a series of attacks on energy infrastructure transformed the conflict from a military confrontation into a full-blown energy crisis. The turning point came mid-week when the South Pars gas field — one of the world's largest — was struck by missiles, prompting Iran to threaten retaliatory attacks on oil and gas facilities across the Gulf, including those in Saudi Arabia and the UAE. By Friday, reports that as much as 17% of Qatar's gas production could be offline for three to five years sent European gas prices spiking by as much as 30%. The International Energy Agency labelled it the greatest energy security threat in history.

Equity markets buckled under the weight of it all. The Nasdaq fell 2% on Friday alone, the Nikkei lost 3.4%, and European indices shed between 1.5% and 2%. The S&P 500 slipped below its 200-day moving average — a closely watched technical level — while the ASX 200 dropped 0.8% on Friday and looked vulnerable to further falls. Since mid-February, virtually every major equity index has moved into negative territory on a normalised basis, with only gold offering any refuge earlier in the period before it too reversed, falling 12% over a fortnight.

But it was the bond market that delivered the week's most dramatic moves. A parade of central bank decisions — from the Fed, ECB, Bank of England, Bank of Japan and RBA — collectively signalled that the era of rate cuts is over, and for some, rate hikes are now firmly on the table. The Bank of England's unanimous vote to hold surprised markets, which had expected two dissenters to push for a cut. Governor Bailey warned of vigilance on inflation, and UK 10-year gilt yields surged to 5% for the first time since 2008. Two-year gilts spiked 40 basis points at one point. In the eurozone, leaked accounts from the ECB suggested rate hikes could be discussed as early as April. Australian 10-year yields pushed above 5.17%.

The Fed held rates steady and left its dot plot unchanged, still projecting one cut this year. But markets were unconvinced, rapidly repricing to reflect the possibility of a US rate hike rather than a cut. The RBA, meanwhile, raised its cash rate by 25 basis points to 4.10%, with Governor Bullock warning that a recession could not be ruled out if inflation proved stubborn.

As the week closed, President Trump issued a 48-hour ultimatum to Iran to reopen the Strait of Hormuz or face attacks on its power infrastructure — a threat Iran countered by vowing to close the strait entirely. The US dollar recovered on Friday but remained lower on the week, while the Australian dollar hovered precariously above 70 US cents. Bitcoin tumbled to $68,800, nearly halving from its October peak.

The week ahead brings CPI data for Australia, Japan and the UK, alongside global PMIs. But with no resolution to the conflict in sight, economic data risks being overtaken by events before the ink is dry.