Markets in the face of uncertainty: geopolitics and macroeconomic data shape investor sentiment.

Investors are eagerly awaiting the decisions that will be made at the upcoming meeting of the Federal Open Market Committee (FOMC), scheduled for March 18. Currently, the market predominantly expects interest rates to be maintained at the level of 3.50-3.75%. This reflects uncertainty regarding the Fed's next steps in light of mixed economic data from the USA, as today's industrial production data indicated a growth of 0.2%, which was in line with forecasts but significantly below last month's (0.7%). This situation suggests that the Fed may hold off on further rate hikes to avoid harming fragile signs of economic growth.

Tensions in the Middle East are attracting the attention of investors, especially in the context of reports about direct contacts between the USA and Iran, as well as statements from former President Trump, who indicated that Israel would not use nuclear weapons. This information may impact oil prices and other energy commodities, especially since an urgent meeting regarding the continuity of refined product supplies took place in the region. Such events can lead to increased volatility in commodity markets, raising concerns about energy security and price stability.

Today's suspension of trading in key contracts on the London Metal Exchange (LME) has introduced additional uncertainty in the markets. Disruptions in the trading of copper, zinc, and aluminum may have far-reaching consequences for global supply chains, especially during a period of rising demand for industrial metals. In this context, the discussions between the Chinese trade negotiator and the USA regarding a possible extension of the suspension of tariffs were also significant, as this could impact future trade relations between these countries. Furthermore, the delay of the meeting between Presidents Trump and Xi also raises concerns about the future of trade agreements.

Today's macroeconomic publications brought mixed signals. In the USA, industrial production increased by 0.2% compared to the expected increase of 0.1%, indicating a moderate improvement in the manufacturing sector. Meanwhile, the Canadian CPI rose by 0.5% month-on-month, which was below the forecasted increase of 0.7%, signaling that inflationary pressure may be lower than expected. Surprisingly positive were the data from China, where urban investments increased by 1.8% year-on-year, compared to the expected decline of 5.1%, which may suggest an economic recovery in the country.

In the coming days, investors will focus on the results of the FOMC meeting and potential changes in the monetary policy of the United States. Further reports regarding US-Iran relations and the situation in the Middle East, which may affect commodity markets, will also be important. It is also worth monitoring the developments in the Chinese market and any potential changes in trade policy between the US and China.