Markets in the face of geopolitical tensions and stable interest rates

The current interest rate in the USA is 3.50-3.75% and expectations for a change at the upcoming FOMC meeting, which will take place on April 29, are virtually zero. Only 0.5% of the market anticipates a hike to the range of 3.75-4.00%, indicating a stabilization of investor expectations in this regard. This stability is significant in the context of concerns about a possible economic slowdown and the impact of high interest rates on the country's economic condition. Investors will continue to closely monitor the statements of Fed members and macroeconomic data that may influence future decisions regarding monetary policy.

The situation in the Middle East is further escalating. Donald Trump, the former president of the USA, suggests that reaching an agreement with Iran is possible as early as the beginning of next week. He simultaneously warns that the lack of an agreement could lead to an escalation of the conflict. Iran, on the other hand, announces that it will respond to any attacks on its infrastructure by targeting similar assets belonging to the USA. Additionally, Oman and Iran are conducting talks aimed at ensuring the smooth transit through the Strait of Hormuz. These actions raise tensions and may impact oil prices, which is crucial for the global economy.

Oil production in Libya has increased to 1.43 million barrels per day, the highest level in over a decade. At the same time, OPEC+ plans a slight increase in production quotas by about 206 thousand barrels per day, which is a symbolic move in the face of the ongoing conflict. These changes may influence the stabilization of oil prices; however, geopolitical tensions related to Iran could significantly impact the market, especially if there are disruptions in supplies through the Strait of Hormuz.

For tomorrow, investors should pay attention to the further development of the geopolitical situation in the Middle East, particularly potential agreements between the USA and Iran. Any new information regarding Fed policy that may influence market expectations regarding interest rates will also be important. Markets will also closely monitor changes in oil production and their impact on the prices of this commodity.