Tensions in the Middle East are affecting global markets.

In recent hours, tensions have escalated between Iran and the United States. Former President Donald Trump threatened attacks on Iranian power plants if Iran does not open the Strait of Hormuz, a key oil route, within 48 hours. In response, the Iranian Revolutionary Guard announced that energy facilities in countries hosting American military bases would be considered legitimate targets for attacks. Furthermore, the Iranian parliament speaker threatened that financial institutions supporting the American military budget and U.S. Treasury bonds could become targets for attacks. At the same time, Saudi Arabia ordered the Iranian military attaché and four other diplomats to leave the country, further intensifying the situation. The British Royal Navy also reacted to these events by sending the submarine HMS Anson to the Arabian Sea, ready to act in case of escalation of the conflict.

In light of the current geopolitical tensions, expectations regarding the Fed's monetary policy remain stable. The current interest rate is 3.50-3.75%, and a decisive majority of analysts (87.6%) expect it to be maintained at this level during the upcoming FOMC meeting scheduled for the end of April. Nevertheless, tensions in the Middle East may influence future Fed decisions, especially if there is further escalation of the conflict, which could impact global financial markets.

The current level of the Fear and Greed Index, at 15/100, indicates extreme fear among investors. This is a decrease compared to the previous week when the index was at 22/100. Such a level of fear often translates into increased volatility in financial markets and greater interest in investments considered safe havens, such as gold or government bonds. However, in the context of the current tensions in the Middle East, even US government bonds may be perceived as risky, which further complicates the situation in the markets.

Tomorrow should bring more clarity regarding the escalation of the conflict between Iran and the United States, which could have a significant impact on global financial markets. Investors should also watch for any new signals from the Fed regarding monetary policy, especially in the context of potential geopolitical effects on the US economy.