Geopolitical tensions and speculation regarding interest rates shape the markets.

The Fed remains in the spotlight for investors, who are eagerly awaiting the upcoming FOMC meeting scheduled for June 17. The current Fed interest rate is 3.50-3.75%, and the market almost certainly (99.6%) expects rates to remain at this level. The market sentiment, measured by the Fear & Greed Index, has slightly increased to a level of 60/100, indicating moderate greed among investors. Expectations regarding the stability of interest rates may suggest that investors are concerned about the possible effects of geopolitical tensions and their impact on the global economy.

The situation in the Middle East is attracting the attention of investors, especially in the context of reports about progress in talks between the USA and Iran. Former US President Donald Trump announced rapid progress in negotiations with Iran, which could influence the easing of tensions in the region. At the same time, Iran and Hezbollah are signaling their readiness to reach a full ceasefire with Israel, which could stabilize the situation in Lebanon. However, Iranian state television warns that there is a high probability of the ceasefire ending if attacks on Lebanon do not cease. Such uncertainties may affect oil prices, especially as OPEC+ plans to increase production quotas for July by 188,000 barrels per day.

Traders are increasingly leaning towards the expectation that the European Central Bank (ECB) will raise interest rates by 25 basis points in June. This is the first time since May 4 that the market fully accounts for such a hike. Changes in the ECB's monetary policy could significantly impact the euro exchange rate and bond markets in Europe. The ECB's decision will be particularly important in the context of recent macroeconomic data, such as the final PMI index for the US manufacturing sector, which stood at 55.1, slightly below forecasts.

OPEC+ plans to increase oil production quotas for July by 188,000 barrels per day, which has been confirmed by three independent sources. Such a decision may be a response to potential threats to oil supplies related to geopolitics, especially in the context of Iran's plans and opposition to blocking the Strait of Hormuz. This strait is a key transport point for oil, and its blockage could lead to significant increases in commodity prices in global markets.

Tomorrow, investors should pay attention to further information regarding talks between the USA and Iran, as well as possible OPEC+ decisions regarding oil production. Any new signals regarding the monetary policy of the Fed and ECB will also be important, as they may impact the currency and bond markets.