🗞️ Middle East Conflict Stalemate — Markets Lose Direction / U.S. Jobs Report Tonight 🌍 Market Theme “War × Inflation
🗞️ Middle East Conflict Stalemate — Markets Lose Direction / U.S. Jobs Report Tonight
🌍 Market Theme“War × Inflation × Uncertainty”
Tensions in the Middle East remain high.
Both sides — the United States and Israel on one side and Iran on the other — continue to signal their willingness to prolong the conflict, with no clear signs of resolution.
The situation has effectively entered a phase of strategic stalemate, where each side is testing the other's endurance.
🛢 Oil as the Key Barometer
To gauge the market impact of the Middle East crisis, crude oil futures have become the most important indicator.
Key concerns include:
-
Risks surrounding the Strait of Hormuz
-
Potential disruptions to global oil supply
-
Rising inflationary pressure
However:
-
The panic selling in equities has somewhat eased
-
The FX market currently lacks strong directional momentum
💱 FX Market
Basic structure
Geopolitical crisis → USD buying
But at the moment:
-
Position adjustments
-
Headline-driven reactions
-
Interest rate expectations
are all interacting.
As a result, the market is trading in a nervous range-bound environment, with no decisive catalyst for a sustained USD rally.
🇺🇸 Trump Administration Developments
Policies from President Donald Trump are also attracting market attention.
Higher oil prices could lead to:
-
Stronger inflation pressure
-
Rising political dissatisfaction ahead of midterm elections
According to reports, the administration is considering measures such as:
-
Restrictions on Russian oil exports
-
Intervention in oil futures markets
👉 These steps may indicate efforts to find an exit path from the conflict.
Meanwhile, reports suggest that Iran may also be experiencing depletion of missiles and weapon systems.
📊 Tonight’s Major Event
🇺🇸 U.S. Employment Report (Nonfarm Payrolls)
Market expectations:
| Indicator | Forecast | Previous |
|---|---|---|
| Nonfarm Payrolls | +55K | +130K |
| Unemployment Rate | 4.3% | 4.3% |
Released simultaneously:
U.S. Retail Sales
| Indicator | Forecast |
|---|---|
| Month-over-month | -0.3% |
| Ex-auto | 0.0% |
👉 The key focus will be deviation from expectations.
However:
-
The approaching weekend
-
Ongoing war-related headlines
may limit the durability of any market reaction.
📊 Other Economic Data
-
Eurozone Final GDP
-
U.S. Business Inventories
-
Canada Ivey PMI
-
Brazil Industrial Production
🎙 Central Bank Events
Scheduled speakers include:
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Mary Daly
-
Jeffrey Schmid
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Susan Collins
-
Piero Cipollone
-
Isabel Schnabel
Additionally, a global central bank conference will discuss:
“The U.S. dollar’s role as a safe-haven asset.”
📈 New Market Theme: Rate Hike Expectations
The chain reaction:
Middle East conflict → Higher oil prices → Rising inflation
is bringing back interest rate hike expectations.
European short-term rate market
ECB rate hike probabilities:
-
Year-end: 80%
-
July: 50%
Bank of Japan
-
April hike probability: 50%
(according to former BOJ board member Maeda)
However, markets may increasingly focus on recession risks rather than rate differentials.
🧭 Summary
The current market is dominated by war-related headlines.
Key drivers:
-
Oil prices
-
Geopolitical developments
-
U.S. employment data
At the same time:
-
Panic selling in equities has eased
-
FX markets have lost clear direction
For now, the environment can be summarized as:
“Markets move on war headlines and adjust on economic data.”
This dynamic is likely to continue in the near term.
