In the new trading week, investors are likely to continue following monetary policy developments alongside the ongoing „Iran war“ topic. The supposed resilience to the cocktail of uncertainty stemming from geopolitical and monetary policy imponderables should not obscure existing risks. Market participants are increasingly giving the cold shoulder to the interplay between threats and diplomatic rapprochement efforts in the Iran war. However, it should hardly come as a surprise that the recent rally is stalling somewhat at ambitious levels. Meanwhile, a handful of investors appear torn between the hope for new record highs and the thought of cashing in their profits. Mid-week is expected to get exciting, particularly with the minutes from the latest Fed central bank meeting. A few laggards are also presenting their results for the past business quarter in the now-concluding earnings season.
Trump threatens again – uncertainty regarding efforts surrounding the end of the war in Iran
US President Donald Trump recently threatened to declare the Strait of Hormus US territory. Efforts regarding an end to the Iran war have stalled. At the same time, the 60-day ceasefire threatens to expire without an extension. Washington and Tehran are still at odds, particularly over Iran's nuclear program and the strategically vital strait (Strait of Hormus), which functions as one of the world's most important routes for things like oil and gas as well as fertilizer.
Fed minutes could provide monetary policy impulses
On Wednesday evening, the FOMC minutes are logically on the agenda (8:00 PM). About two weeks ago, the US monetary authority had most recently left the key interest rate level unchanged, as expected.
According to the CME Group's „FedWatch Tool,“ 69.4 percent of market participants expect a pause in rate hikes at the September 16 meeting, and 30.6 percent expect a 25-basis-point rate hike.
Focus on weekly US initial jobless claims and purchasing managers – Laggards in reporting season ahead
The initial weekly jobless claims in the US should also be kept in view (2:30 PM). On Friday afternoon, purchasing managers from the University of Michigan are to be scrutinized for economic indicators (3:45 PM). The figures for the „services,“ „manufacturing,“ and „total“ sectors should be noted.
In the earnings season, stragglers remain on the agenda on Wednesday with Estee Lauder (ISIN: US5184391044) and on Thursday with Alibaba (ISIN: US01609W1027), Deere & Co (ISIN: US2441991054), and Walmart (ISIN: US9311421039).
Dow Jones Industrial Average Index
