Geopolitics and monetary policy in the spotlight of investors

Relations between the USA and Iran have once again come to the forefront of global politics. President Trump announced that an agreement with Iran could be reached in the coming days, which would impact the easing of tensions in the region. At the same time, Iran declared that the Strait of Hormuz is open for navigation, which is crucial for global oil supply. Nevertheless, the American naval blockade remains in effect, and the differences between the countries remain significant. For the markets, particularly the energy and commodities sectors, stability in this region is crucial, which is why investors will closely monitor the developments.

Currently, the Federal Reserve's interest rate is 3.50-3.75%, and expectations regarding the upcoming FOMC meeting indicate a high probability of maintaining the current level. However, the futures market for short-term interest rates has seen an increase as investors begin to price in the possibility of interest rate cuts later this year. Fed swaps indicate a potential cut of 15 basis points by December. Such a perspective may influence an increase in risk appetite, which is reflected in the current level of the Fear & Greed index.

Tomorrow will bring further observations regarding the geopolitical situation in the Middle East, especially in the context of a potential USA-Iran agreement. Investors will also be monitoring any signals from the Fed that may influence expectations regarding future monetary policy. It will also be important to monitor market reactions to the changing investor sentiment.