Market Wrap

Market sentiment turned cautious as President Donald Trump abandoned efforts to recruit international partners for the Iran war, openly criticizing NATO allies as well as Japan, Australia, and South Korea for rejecting his appeals for military aid. Tensions in the Middle East remain acute following reports that Israel killed Iran’s security chief, Ali Larijani.

The DJIA, the S&P500, and the Nasdaq Composite Index rose 0.1%, 0.3%, and 0.5% respectively. The Eurostoxx 50 rose 0.5%. The Dollar Index eased 0.1% to 99.58. The US Treasury yield curve showed mixed results as investors positioned for the Fed meeting. The US 2Y yield held steady at 3.67%, while the 10Y yield dropped 2bp to 4.20%

The primary focus today is the FOMC interest rate decision. While a hold at 3.50%-3.75% is expected, the updated "dot plot" and PPI data will be critical in determining if the Fed will pivot to address energy-driven inflation.

Aluminium demand in China is weakening despite prices hitting a four-year high amid the Iran conflict. Inventories of primary aluminium have exceeded 1.3 million tons, the highest since 2020, while buyers limit purchases to immediate needs, Primary Aluminum cash-to-three-month spread was quoted at $5.38 a ton on March 17, 2026, on the London Metal Exchange, decreasing $27.62 from the previous trading day. Negative for Aluminium prices.

US business activity in the New York Fed district for Mar rose to -22.6, compared to -25.7 in Feb, according to the Business Leaders Survey. Six-month business activity fell to 12.7 vs 17.5, business climate fell to -46.2 vs -41.7 prior month, employment rose to -8.5 vs -9.7, wages fell to 33.7 vs 37.

US ADP private payrolls rose an average of 9,000 per week in the four-week period ending 28 Feb, with ADP reported a previous week revised reading of 14,750. Sentimentally positive for USD.

Data watch: Key data releases out of the US tonight include Feb’s PPI final demand (est. 0.3% m/m or 3% y/y vs. 0.5% prior or 2.9% y/y) and PPI final demand ex food and energy (est. 0.3% m/m or 3.7% y/y vs. 0.8% m/m or 3.6% y/y before); Jan’s factory orders (est. 0.1% m/m vs. -0.7% prior).