Geopolitical developments in the Middle East conflict are likely to remain one of the key topics of discussion on the market. Following the US attack on Iranian nuclear facilities, investors are now betting on lasting peace between Iran and Israel. Overall, however, the conflict could continue to hover like a sword of Damocles over the heads of market participants. As the week progresses, it is particularly important to keep an eye on key US economic data.
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Source: TradingView
Trump announces calls for arms between Israel and Iran - investors bet on further signals of détente
After US President Donald Trump announced a ceasefire between Israel and Iran, both sides once again accused each other of attacks. Shortly after the ceasefire began, Israel accused Iran of firing missiles. Iran, on the other hand, denied the accusations. The last missiles were fired a few minutes before the start of the agreement, it said.
Trump urged compliance with the ceasefire and called on Israel to end new attacks following the announcement by Defense Minister Katz. "Don't drop those bombs. If you do, it's a serious offense. Bring your pilots home, now," Trump said on his Truth Social platform.
Investors should continue to keep a wary eye on all developments. A renewed escalation in the Middle East is likely to put the brakes on risk appetite once again.
Despite the recent distracting news from the Middle East, the smouldering trade conflict between the US and China, for example, is likely to remain one of the key issues on the market. Investors are also likely to be looking for further signs of easing here.
Fed chief could send monetary policy stimulus - GfK consumer sentiment and US economic data ahead on Thursday
Fed Chairman Jerome Powell is also expected to hold a hearing this afternoon at 16:00.
The economic data calendar promises potential stimuli, especially on Thursday. In Germany, for example, new data on consumer sentiment from GfK will be published (08:00).
On the US side, new orders for durable goods, the GDP growth rate and weekly jobless claims are expected (14:30).
Core rate for personal consumption expenditure in the USA could provide monetary policy impetus
On Friday, attention is likely to focus in particular on the publication of important US price data. The core rate for personal consumption expenditures is expected at 14:30, which could provide important inflation signals.
Consumer confidence (University of Michigan) rounds off the trading week at 16:00.
