Highlights
Energy prices surging again on top of Monday's gains while the dollar and bond yields are up again and stocks get hit harder Tuesday. Focus remains on intensifying conflict in the Middle East and the effective closure of the Straits of Hormuz and Iran's threats to energy infrastructure around the Persian Gulf.
Markets have been rattled by President Trump's"whatever it takes" comment Monday on US plans in Iran and the prospect of a prolonged, widening, unpredictable conflict. Later Trump added that"wars can be fought forever."
More gains in global bond yields show markets focusing on the inflationary effect of higher fuel prices more than the deflationary impact of weaker economic growth as oil consumers lose spending power and business activity is disrupted. Demand for US Treasuries is supposed to rise when investors look for safe havens but that effect appears limited.
Two Federal Reserve speakers on the calendar Tuesday could offer a glimpse of the Fed's reaction to the new geopolitical risk factors, though one would expect them to be very cautious given the newness of the situation and the high level of uncertainty. Markets view rising energy prices as another factor likely to keep rates on hold for longer. That is reflected in the more dramatic moves higher in short-term yields versus longer yields as the shorter end tends to be more sensitive to changes in Fed policy.
New York Federal Reserve Bank President John Williams is scheduled to speak at 9:55 am ET before the ACU Governmental Affairs Conference 2026. Kansas City Fed President Jeffrey Schmid is to speak on at 10:10 am ET at the Metro Denver Executive Club.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.