(Bloomberg) — Financial markets traded in a tight range, with global equities hovering near record highs, after Donald Trump’s meeting with Ukraine’s president and European leaders concluded on a hopeful note with a call for peace talks with Russia.
Oil steadied following the meeting, as investors weighed the potential implications for regional stability and energy flows. Brent dipped 0.2% after gaining in the prior session. Asian stocks edged 0.2% lower. Treasuries were little changed after yields rose Monday.
Intel Corp. rose 5.4% in after-market trading as SoftBank Group said it will invest $2 billion in the company’s common stock.
Markets were cautiously optimistic on the Ukraine peace process after Trump urged Vladimir Putin to begin planning a summit with Volodymyr Zelenskiy. Markets now face a pivotal week ahead as the Federal Reserve’s annual Economic Policy Symposium begins Thursday in Jackson Hole, Wyoming, with traders looking for signals on the path of interest rates.
“Money is just waiting on the sidelines at the moment, until a fresh signal to move markets to fresh highs,” Nick Twidale, chief analyst at ATFX Global Markets in Sydney. “Investors were preparing for volatility after the talks but that has not eventuated and so they will now focus on central bank updates into the end of the week, with a huge focus on the Fed.”
Trump called Putin and urged the Russian leader to begin making plans for a summit with Zelenskiy, after meeting the Ukrainian president and European leaders at the White House on Monday.
The proposal — which Trump pitched as a one-on-one summit between Ukraine and Russia’s leaders that would be followed by a trilateral gathering involving all three — represented the latest turn in the US president’s push to broker a quick end to a conflict that has lasted over three years.
US Treasuries slipped for a third day Monday ahead of a speech by Jerome Powell on Friday.
Powell is expected to unveil the Fed’s new policy framework — the strategy it’ll use to achieve its inflation and employment goals. Powell may also drop some hints about the Fed’s thinking ahead of its September policy meeting.
Interest-rate swaps show a roughly 80% chance that the Fed will lower rates next month by 25 basis points, with two cuts fully priced in by the end of the year.
“For now, the market appears to be betting that signs of labor-market weakness will outweigh inflation risk in the Fed’s rate-cutting debate,” said Chris Larkin at E*Trade from Morgan Stanley.
Powell’s Jackson Hole speech will be the focal point this week, with the nature of the debate shifting from whether the Fed will cut rates to how much and how quickly, according to Jason Pride and Michael Reynolds at Glenmede.
“The stars are aligning for a September rate cut; inflation remains relatively restrained and the labor market is beginning to show early signs of weakness,” they said.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:43 a.m. Tokyo time Hang Seng futures rose 0.1% Nikkei 225 futures (OSE) fell 0.4% Japan’s Topix fell 0.3% Australia’s S&P/ASX 200 fell 0.7% Euro Stoxx 50 futures rose 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was unchanged at $1.1661 The Japanese yen was little changed at 147.84 per dollar The offshore yuan was little changed at 7.1867 per dollar The Australian dollar was little changed at $0.6493 Cryptocurrencies
Bitcoin fell 0.3% to $116,075.94 Ether fell 1% to $4,290.6 Bonds
The yield on 10-year Treasuries was unchanged at 4.33% Japan’s 10-year yield advanced 1.5 basis points to 1.580% Australia’s 10-year yield advanced five basis points to 4.31% Commodities
West Texas Intermediate crude fell 0.2% to $63.28 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
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