Asia opened on a cautious note, with regional equities broadly flat and oil softer as traders balanced promising diplomatic signals on Russia-Ukraine with the run-up to Jackson Hole.
European equity markets opened modestly higher after President Zelensky said security guarantees for Ukraine could be agreed within 10 days following talks with President Trump and European leaders, while Washington is working to arrange a Putin-Zelensky meeting and a subsequent trilateral summit.
Japan cools off, FX steadies ahead of Fed
In Japan, the Nikkei 225 printed a fresh intraday record before easing to -0.3%, dragged by a 2.5% fall in SoftBank after it disclosed a $2bn stake in Intel. The MSCI Asia ex-Japan index dipped 0.1% after a mild pullback on Wall Street.
The US dollar held most of Monday’s gains ahead of the Fed’s 21-23 August Jackson Hole symposium: USD/JPY edged down 0.2% to 147.60, EUR/USD was steady at 1.1670, and the US Dollar Basket dipped -0.1% after a 0.2% rise in the prior session.
Rates watch: Jackson Hole is the swing factor
Rates remain the week’s main macro swing factor. Money markets put the odds of a 25 basis point Federal Reserve (Fed) cut on 17 September at 83.6%, leaving risk assets sensitive to Chair Powell’s guidance on the outlook and policy framework; a clearly less-dovish tone would challenge the current setup.
Commodities: crude eases, gold firms
Commodities softened on hopes of progress toward a Ukraine settlement that could lift sanctions on Russian crude. Brent crude oil dipped -0.4% and WTI crude oil -0.6%. Spot gold firmed 0.1% to $3,336.51/oz.