Asian markets plunged on Tuesday ahead of a key meeting of central bankers
Asian markets plunged on Tuesday ahead of a key meeting of central bankers, where traders anticipate a change in monetary policy. This week’s focus is the Fed’s August 21-23 Jackson Hole symposium, where Chair Jerome Powell is due to speak on the economic outlook and the central bank’s policy framework.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped by 0.2% on early Tuesday. Japan’s Nikkei shares hit a record high on Monday, rising 0.7% to 43,683.56.
Market await policy hints from the Fed’s upcoming annual meeting
The Nikkei share gauge dropped 0.5% early Tuesday. A 5% plunge in SoftBank Group also caused a drop in the stock index after the firm announced a $2 billion stake in struggling U.S. chipmaker Intel.
The greenback continued moving higher amid traders’ policy hints of anticipation from the Fed ahead of its annual meeting in Jackson Hole, Wyoming. Kyle Rodda, an analyst at Capital.com, acknowledged that markets are cautious for potential market volatility in the wake of the Fed’s Jackson Hole symposium.
According to CME FedWatch, there’s an 83.6% chance of the Fed cutting rates by 25 basis points at its September 17 meeting. As previously reported by Cryptopolitan, last week’s inflation data led to a rise in the probability of a potential September rate cut.
The dollar didn’t move much, maintaining its price at 147.78 yen. The dollar index, which tracks the greenback against a basket of currencies, gained by 0.2% in the previous session to 98.171.
U.S. crude prices plummeted by 0.2% to $63.29 a barrel. Spot gold traded higher at $3,338.67 per ounce.
The euro also traded steady at $1.1658 amid heightened geopolitical tensions in the region as traders evaluated promising diplomatic signals toward ending hostilities between Russia and Ukraine. European futures climbed higher, with German DAX futures rising by 0.2%, while the Pan-region Euro Stoxx 50 futures and the FTSE futures each added 0.3%.
Trump meets with Zelenskyy in Washington
European futures gained after U.S. President Donald Trump met with Ukrainian President Volodymyr Zelenskyy, together with other EU leaders and NATO partners in Washington, D.C. Zelensky acknowledged that security guarantees for his country will likely be worked out within 10 days after the talks. He also called for the release of Ukrainian children forcibly taken by Russian forces, as well as the release of prisoners of war and other civilians.
Trump revealed that he spoke with European Commission President Ursula von der Leyen regarding the problem of the missing children. He said he hopes to return missing kids to their families.
Von der Leyen also mentioned that every single Ukrainian child abducted by the Kremlin must be returned to their families. Secretary of State Marco Rubio said Ukraine and Russia would need to make some concessions and that land would be part of the conversation.
NATO Secretary General Mark Rutte said on Monday that the meeting was very successful. He expects security guarantees between Ukraine and Russia as part of a peace deal, adding that they are important to consider what’s next for Ukraine’s territory and also to prevent Putin from ever trying again to invade parts of Ukraine.
The meeting came as Trump and Russian President Vladimir Putin met in a summit in Alaska last week, but didn’t reach an agreement on ceasing hostilities in the Ukraine war. Trump also hinted at a trilateral summit afterwards among the three heads of state.
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