The situation in the financial markets remains marked by great uncertainty. Instead of a decisive outcome in the Iran war, geopolitical fog is thickening over the markets. While diplomatic progress is absent, military tensions dominate. The stock market is currently trading less on facts and more on the risks of escalation. Glimmers of hope for negotiations are immediately dashed by new attacks and veiled threats.
As long as the Strait of Hormuz remains a focus of military risks, the oil price is likely to remain a persistent disruptive factor for stock markets. The focus of the current trading week should primarily be on the "NFPs".
It should be noted that US stock exchanges will be closed on the last trading day of the week due to Good Friday.
Middle East conflict now in its fifth week – escalation of military tensions conceivable
The military escalation in the Middle East has now been ongoing for around four weeks. Investors fear a further worsening of the situation. US President Donald Trump recently intensified speculation about a possible ground offensive in Iran. „Maybe we'll take over the island of Kharg, maybe not. We have many options,“ he said in an interview with the Financial Times. „It would also mean that we would have to stay there for a while.“ Around 90 percent of Iran's oil exports are handled above the island in the Persian Gulf.
The high oil price, which is fueling inflation and could therefore undermine general interest rate cut expectations, should continue to worry investors.
At the end of April (April 29), the US Federal Reserve plans to convene to decide on the future key interest rate level. According to the CME Group's „FedWatch Tool,“ 96.4 percent of market participants expect an interest rate pause, and 3.6 percent expect an interest rate hike of a quarter percentage point.
„JOLTS“ could offer a first preview of NFPs on Tuesday
The economic data calendar promises potential catalysts in the coming days.
On Tuesday, the so-called „JOLTS“ (Job Openings and Labor Turnover Survey) are expected (4:00 PM), which could provide an early preview of the official US labor market data (Non-Farm Payrolls).
In addition to US retail sales (2:30 PM), the ISM Purchasing Managers' Index for manufacturing will be in focus this afternoon (4:00 PM).
For Wednesday, the ADP employment change (3:15 PM) is usually expected two days before the release of the US jobs data.
The counterpart to the ISM Purchasing Managers' Index for the manufacturing sector follows at 4:00 PM.
US labor market data: Economists expect job growth compared to the previous month
US labor market data are on the agenda for Friday (2:30 PM). Economists expect a gain of 55,000 nonfarm payroll jobs, after 92,000 jobs were lost in February. The unemployment rate is expected to remain at 4.4 percent, unchanged from the previous month.
US stock investors will therefore likely only be able to react to the economic data on the following Monday (Easter Monday).
Dow Jones Industrial Average Index
