Welcome to the first session after the FOMC decision. The Federal Reserve kept interest rates unchanged at 3.75%, in line with expectations, despite slightly higher inflation and ongoing geopolitical uncertainty related to Iran.
Markets reacted negatively. Equity indices continued their sell-off, with the Dow Jones Industrial Average reaching new lows for 2026. Futures remain under pressure, suggesting that sentiment is still clearly risk-off.
On the geopolitical front, tensions escalated further. Iran reportedly caused significant damage to a major natural gas facility in Qatar, increasing concerns about global energy supply disruptions. In response, Donald Trump stated that the US would retaliate and mentioned the possibility of targeting Iran’s South Pars gas field. This signals that the conflict is not only ongoing but potentially intensifying.
Energy markets are reacting accordingly. Oil prices surged sharply, with Brent Crude gaining more than 10% in the previous session. This move reflects growing fears of supply disruptions and reinforces the risk-off tone across markets.
At the same time, other commodities are showing a different picture. Precious metals declined significantly, with gold and silver both moving lower. Copper also had a bearish session. This divergence highlights how energy markets are currently being driven by supply shocks, while other commodities are influenced more by broader risk sentiment and positioning.
In the currency market, the US dollar strengthened after the FOMC decision, benefiting from its safe-haven status and relative yield advantage. Today we are seeing a modest correction, which is typical after a strong move. During the Asian session, antipodean currencies and some European currencies are gaining ground.
Looking at the macro calendar, today is quite busy, especially in Europe. We already received mixed labor market data from Australia, with stronger employment but a higher unemployment rate. The Bank of Japan also kept rates unchanged.
Still ahead, we have a series of central bank decisions. The Swiss National Bank, the Bank of England, and the European Central Bank are all expected to leave rates unchanged, but their guidance and tone will be closely watched.
Overall, markets remain highly sensitive to both central bank communication and geopolitical developments. With elevated volatility and multiple risk factors in play, sentiment continues to favor caution.