Markets influenced by PMI data and geopolitics

The current Fed interest rate is 3.50-3.75% and most analysts do not expect any change at the upcoming FOMC meeting, which will take place on July 29. Current market expectations indicate a 78.1% chance of maintaining the current interest rate level, while only 21.9% of investors foresee the possibility of an increase to 3.75-4.00%. In the context of the market, low expectations for further rate hikes may indicate stability for the bond and credit sectors, but at the same time suggest investor caution regarding future economic growth.

PMI indicators for the eurozone and the United Kingdom provided mixed signals. Eurozone PMI ultimately stood at 50, surpassing forecasts of 49.5, suggesting a stabilization of economic activity. In contrast, the reading of 49.3 in the United Kingdom, slightly below expectations (49.4), indicates ongoing challenges in the economy. In China, the services PMI reached 54.1, exceeding forecasts but slightly declining from the previous level of 54.4. Data from China is particularly significant given its impact on global demand and trade. Positive data may support Asian and global markets; however, any signs of slowdown will be closely monitored.

Houthi from Yemen announced that any further attack by the Saudis will be met with attacks on Saudi airports and strategic interests. Such tensions in the Middle East region can have a direct impact on oil prices, considering the strategic importance of the region for global supplies of this raw material. An increase in geopolitical uncertainty often leads to a rise in energy commodity prices, which can be felt in global markets.

Tomorrow's attention of investors will focus on further macroeconomic data and potential escalations of geopolitical tensions. Particularly important will be any new information regarding the situation in the Middle East and further signals from the economies of Europe and Asia that may affect market sentiment.