Global markets are entering a crucial week as investors prepare for a series of major central bank decisions. Although geopolitical tensions in the Middle East are still a risk, market attention is now turning to interest rate decisions from the Bank of Japan, the Federal Reserve, and the Bank of England.

Expectations of a US interest rate cut in 2026 have now almost completely disappeared. Rising US bond yields have made the US dollar stronger as global capital flows flow into dollar-denominated assets.

On the other hand, the US stock market is facing pressure. Higher borrowing costs are tightening financial conditions, while energy prices that remain high are raising concerns of longer-lasting inflation.



The oil market was relatively stable over the weekend, but prices were still at high levels. Geopolitical tensions in the Middle East continue to maintain a risk premium in energy markets, so oil prices remain an important factor for global inflation.



The strengthening of the US dollar was also supported by an increase in Treasury yields. As long as high interest rate expectations hold, the dollar is likely to remain an attractive asset for global investors.



Meanwhile, the US stock market is facing continued pressure. The increase in yield makes the company's funding costs increase and limits the potential for stock index increases in the short term.

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