Asian markets were largely steady on Tuesday, while crude prices declined ahead of a major central bank meeting, as investors weighed signs of progress in talks aimed at ending the conflict between Russia and Ukraine.
European equity futures opened slightly higher following remarks from Ukrainian President Volodymyr Zelenskiy, who said that “security guarantees for his nation will likely be worked out within 10 days” after discussions with U.S. President Donald Trump and European leaders.
Japan’s Nikkei hit a fresh intraday record before easing back, while the U.S. dollar retained gains from the prior session as traders awaited signals on policy direction from the Federal Reserve’s upcoming Jackson Hole symposium in Wyoming.
“The Jackson Hole Symposium looms as one potential source of volatility, and going into the event, the markets remain cautious,” Kyle Rodda, an analyst at Capital.com, wrote in a note to clients. “A dovish shift is being priced in, with further strength in equity markets – and weakness in the U.S. dollar – reliant on the Fed meeting these expectations.”
MSCI’s broad index of Asia-Pacific shares outside Japan fell 0.1%, following mild losses on Wall Street. Euro Stoxx 50 futures rose 0.2%, while contracts for Germany’s DAX and the UK’s FTSE gained 0.1% each.
NATO Secretary General Mark Rutte told Fox News on Monday that Trump’s meeting with Zelenskiy and European and NATO partners had been “very successful.” The meeting came after a summit in Alaska between Trump and Russian President Vladimir Putin, which failed to produce a ceasefire in the 3½-year-long war.
Trump also announced via social media on Monday that he had called Putin and started arranging a meeting between Putin and Zelenskiy, followed by a trilateral summit of the three leaders.
While geopolitical developments remain in focus, attention is also on the Fed’s Jackson Hole meeting from August 21-23, where Chair Jerome Powell will discuss the economic outlook and the central bank’s policy strategy. Money markets currently imply an 83.6% probability of a 25-basis-point rate cut at the Fed’s September 17 meeting, according to CME FedWatch.
“Central banks seem to be easing even though inflation is creeping a little bit high in many countries,” Tapas Strickland, head of market economics at National Australia Bank, said in a podcast. Bond investors may be “demanding a little bit more compensation for duration, just given the potential for the inflationary risk out there.”
Japan’s Nikkei opened higher but ended down 0.1%, weighed by a 2.5% drop in SoftBank (LSE:0R15) after the company disclosed a $2 billion investment in struggling U.S. chipmaker Intel (NASDAQ:INTC).
The dollar slipped 0.1% to 147.78 yen, while the euro held steady at $1.1663. The dollar index, which tracks the greenback against a basket of currencies, was largely unchanged after a 0.2% rise in the previous session.
Oil prices declined as markets considered the potential for an easing of the Ukraine conflict, which could lift sanctions on Russian crude. U.S. crude fell 0.8% to $62.92 a barrel, and Brent crude dropped 0.7% to $66.15. Spot gold gained 0.2% to $3,337.41 per ounce. Bitcoin retreated 1% to $115,257.59, while ether fell 2.7% to $4,224.33.
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