The Middle East conflict is likely to demand a lot from investors in the coming days. Should the USA actively intervene in the war, this could be seen as a further escalation.
The Fed's key interest rate decision this evening could also send out monetary policy signals. However, it remains unlikely that the US monetary authorities will lower interest rates.
Please note that the stock exchange doors in Frankfurt am Main will remain open on Thursday despite the Corpus Christi holiday.
DAX
Source: TradingView
Uncertainty due to geopolitical risks likely to persist - Is the USA getting involved in the war?
Nervousness over the ongoing Middle East conflict between Iran and Israel is likely to continue. On Tuesday, US President Donald Trump called for Iran's unconditional surrender and at the same time warned that the United States' patience was at an end.
Market participants are likely to be increasingly prepared for a possible intervention by the US military in the conflict.
US Federal Reserve to decide on key interest rate this evening
This Wednesday evening, investors will be looking in particular at the Fed's key interest rate decision, which is expected at 20:00. From 20:30, the FOMC press conference with Jerome Powell will be tapped for monetary policy clues in the usual manner.
CME Group's "Fed Watch Tool" signals interest rate pause
The CME Group's "Fed Watch Tool" signals a 99.9% chance of a further interest rate pause this evening, meaning that the interest rate band is likely to remain at 4.25% to 4.50%. The scenario of a rate cut of 25 basis points is assessed as having a counter probability of 0.1%.
Bank of England and People's Bank of China also decide on key interest rate - German producer prices in focus on Friday
Meanwhile, the Bank of England will meet on Thursday to decide on the future of monetary policy (13:30).
In the night from Thursday to Friday (03:15), the People's Bank of China (PBoC) will decide on the interest rate level for the Middle Kingdom.
Last but not least, German producer prices are on the agenda for the last day of the trading week (08:00).
On the US side, the Philly Fed manufacturing index could provide some movement (14:30).
