Global Focus Next Week: Worldwide Attention on the Situation in the Middle East Conflict, Super Central Banks to Make Significant Headlines Next Week

Investors will seek clear signals in the coming week to assess to what extent the conflict in the Middle East has disrupted expectations for interest rate cuts by the Federal Reserve and other central banks this year. They are also preparing for the latest developments in the Iran war that could shake the markets. Against the backdrop of escalating tensions in the Iran war, causing a surge in oil prices and chain reactions on various global assets, the Federal Reserve policymakers will hold a meeting next week. During the two-day meeting, Fed officials will assess the impact of this energy shock on inflation and economic growth, and the Fed will also release its latest economic forecasts. Currently, due to the war factor, market expectations for interest rate cuts this year have cooled significantly, whereas previously, the anticipation of rate cuts has been an important factor supporting the bullish sentiment in the stock market. Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones, said, "The Federal Reserve will be the focus of the market, especially in the current situation where rate cut expectations have been significantly lowered." Since the outbreak of the Iran war, U.S. stock indices have been trending lower, and market volatility has increased significantly. Investors are closely monitoring the drastic fluctuations in oil prices; earlier this week, U.S. crude oil prices briefly surged to nearly $120 per barrel before falling back to around $100 per barrel, a level of high concern for the market. Iran has stated that global markets should be prepared for oil prices to rise to $200 per barrel. On Friday, the U.S. bombed Iran's oil export hub on Khark Island, targeting only military facilities on the island. Trump threatened that if Iran continued to disrupt shipping in the Strait of Hormuz, he would destroy the oil infrastructure on the island. Analysts point out that Khark Island is a key source of revenue for the Iranian government and military, and if Iran loses control of Khark Island, the country's operations will face serious difficulties. Therefore, if the island's energy facilities are attacked, it will have a significant economic impact. Iranian Foreign Minister Zarif stated that if Iran's energy facilities are attacked, Iran will respond. He claimed that if Iranian facilities are targeted, Iran may strike American-owned facilities in the region or companies with American interests. Sid Vaidya, Chief Investment Strategist at TD Wealth, said, "The market is experiencing severe volatility, and traders are quick to react to any news related to the Iran conflict, whether positive or negative." It is widely expected that the Federal Reserve will keep interest rates unchanged for the second consecutive meeting in its policy statement to be released on Wednesday. Last year, the Fed cut interest rates to support a weakening labor market, but paused the easing cycle in January this year as it believed that employment and inflation risks had eased. Investors previously expected more rate cuts this year, which are usually seen as positive for stocks and other risky assets. However, with the surge in energy prices potentially pushing up inflation, market expectations for rate cuts have been lowered. As of Friday, the federal funds rate futures pricing showed that the market expects a slightly smaller rate cut than the standard 25 basis points by December. At the end of February, before the war broke out, the market had originally expected two rate cuts this year. At this meeting, the Fed will also release updated economic forecasts of policymakers, including their expectations for future interest rates, inflation, and the job market. Paul Nolte, Market Strategist at Murphy & Sylvest, said, "This meeting is likely to set the tone for policy this year, especially in how to deal with the inflation pressure generated by the rise in oil prices." For Powell, this will be the penultimate time he chairs a Federal Reserve meeting before his term ends in May. The next rate adjustment may have to wait until Kevin Warsh, Trump's nominee for Federal Reserve Chairman and former Fed governor, formally takes over the central bank. In addition to the Federal Reserve, the European Central Bank, Bank of Japan, Bank of Canada, Reserve Bank of Australia, and Bank of England will also announce their interest rate decisions. The sharp rise in energy prices due to the Middle East conflict is causing great concern for central bank policymakers around the world. In terms of financial reports, only a few companies such as Alibaba, XPeng Motors, Micron Technology, FedEx, and Accenture are worth paying attention to. From Monday to Thursday next week, NVIDIA will hold its annual GTC conference, which may once again shift market focus back to AI-themed trading. Earlier this year, the concept of AI triggered significant fluctuations in tech stocks and other stocks. It is reported that NVIDIA is preparing to unveil new details about its CPU optimization for intelligent AI at the GTC conference, and a pure CPU rack is likely to be showcased at the exhibition. According to NVIDIA's official introduction, in addition to the two-hour speech by Huang Renxun on Monday, the GTC Park will host an "assemble lobsters" event throughout the event, where participants can deploy an AI assistant that is always online on site. However, investors generally expect that geopolitical news related to Iran will still be the main driving force in the market. Adam Turnquist, Chief Technical Strategist at LPL Financial, wrote, "Market trends will continue to be driven by news headlines, as investors wait for clearer signals on when the U.S. will withdraw from the Middle East conflict." Overview of important events next week: Monday (March 16): Year-over-year social consumption total retail sales in China for January-February, year-over-year industrial increase for enterprises above designated size in January-February in China, CPI month-on-month for February in Canada, New York Fed manufacturing index for March in the U.S., industrial production month-on-month for February in the U.S., press conference by the State Council on the economic situation. Tuesday (March 17): RBA interest rate decision in Australia by March 17, ZEW economic sentiment index for March in the Eurozone, leading indicators month-on-month for February in the U.S., pending home sales index month-on-month for February in the U.S. Wednesday (March 18): API crude oil inventories until the week of March 13 in the U.S., final year-on-year CPI for February in the Eurozone, annual PPI for February in the U.S., monthly PPI for February in the U.S., interest rate decision by the Bank of Canada until March 18, factory orders month-on-month for January in the U.S., EIA crude oil inventories until the week of March 13 in the U.S., EIA strategic crude oil reserve inventories until the week of March 13 in the U.S. Thursday (March 19): Interest rate decision by the Federal Reserve until March 18 in the U.S., press conference by Fed Chairman Powell on monetary policy, Swift RMB share in global payments for February in China, unemployment rate for February in the U.K., interest rate decision by the Swiss National Bank, initial jobless claims until the week of March 14 in the U.S., interest rate decision by the ECB, natural gas inventories until the week of March 13 in the U.S., target interest rate until March 19 by the Bank of Japan, press conference by BOJ Governor Kuroda on monetary policy. Friday (March 20): Tokyo Stock Exchange closed for one day, one-year pricing rate in China until March 20, monthly PPI for February in Germany, interest rate decision by the Central Bank of Russia. This article is reproduced from Tencent Zixuan Stock, GMTEight Editor: Chen Wenfang.