As expected, the Middle East conflict has kept investors on both sides of the Atlantic very busy over the past few days. The escalation between the parties to the conflict and the associated question marks over the global economy have had a negative impact on general risk appetite.
The official US labor market data could possibly provide important monetary policy stimuli this afternoon.
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Middle East conflict continues - legs of geopolitical stock exchanges are out longer than expected
The Middle East conflict is likely to continue to demand a great deal from investors. Despite interim attempts at recovery, sentiment remains fragile and therefore fragile, especially as an end to the military escalation does not appear to be in sight for the time being. The legs of the geopolitical stock exchanges are therefore clearly taking much longer than initially assumed. In Germany in particular, there is likely to be great uncertainty as to what impact the rising energy prices will have on the economy.
Eurozone inflation higher than expected - ISM purchasing managers for manufacturing and services sector positive
At 52.4 points, the ISM Purchasing Managers' Index for the manufacturing sector slightly exceeded expectations (51.8 points). In the previous month, however, the index had stood at 52.6 units.
The first estimates of eurozone inflation were published on Tuesday. At 1.9 percent compared to the previous month, inflation in February was 1.9 percent, 0.2 percentage points above expectations and above the comparable figure from the previous month (1.7 percent).
At 56.1 points in the middle of the week, the Purchasing Managers' Index for the services sector clearly exceeded the previous estimate of 53.5 points, compared with 53.8 points previously.
Focus on non-farm payrolls: economists expect a significant reduction in job creation compared to the previous month
According to current estimates, economists expect an increase in jobs outside the US agricultural sector of 59,000 units, after a total of 130,000 new jobs were created in January. The unemployment rate is expected to remain unchanged at 4.3%.
„CME Group's “Fed Watch Tool" signals interest rate pause for Fed meeting on March 18
Investors could soon turn their attention back to monetary policy developments. The US Federal Reserve (Fed) is scheduled to decide on the future key interest rate level on March 18.
According to the CME Group's „Fed Watch Tool“, 2.7% of market participants currently expect a rate cut of a quarter of a percentage point and 97.3% expect a pause in interest rates. The interest rate band itself currently stands at 3.50 to 3.75 percent.
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