Asian Stocks Rally with Nikkei at All-Time High; Global Markets Eye Fed Rate Cut Signals
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European Stocks Rise Slightly
European markets opened slightly higher on Tuesday, supported by optimism about ongoing Russia-Ukraine talks and hopes for central bank policy updates. The STOXX 600 index inched 0.1 percent higher, while France's CAC 40 added 0.2 percent. Germany's DAX and Britain's FTSE 100 both rose 0.1 percent, indicative of a largely tentative but still positive mood.
Markets rose after Ukrainian President Volodymyr Zelenskiy indicated that security guarantees for Ukraine could be agreed upon within 10 days following discussions with U.S. President Donald Trump and other key European leaders. Traders took the development as a possible sign of a moderation of geopolitical risks, but uncertainty remained.
Asia Awaits Fed Signals
Trading sentiments in Asia were mixed as investors awaited the U.S. Federal Reserve's Jackson Hole symposium later in the week. The MSCI Asia-Pacific index excluding Japan fell 0.2%, while Japan's Nikkei reached a record in the session but finished 0.4% lower.
The decline was largely driven by losses in SoftBank, which dropped after revealing a $2 billion stake in struggling U.S. chipmaker Intel. Chinese stocks also lost ground as investors weighed fresh economic stimulus from Beijing. Analysts said that markets have already priced in expectations for a more dovish Fed, with traders suggesting an 83.6% chance that the Fed will cut rates next month, according to CME's FedWatch tool.
Oil and Currency Moves
Oil prices dropped as investors rebalanced their portfolios on the back of the softer geopolitical rhetoric. Brent crude fell 0.8% to $66.07 a barrel, and U.S. crude fell 0.9% to $62.88. The decline in energy prices that fueled the drop in yields damped concerns over supply disruptions but also demonstrated caution over global demand.
Currency markets remained steady. The euro was up 0.1% at $1.1670, and the dollar was 147.64 yen. The dollar index was flat after edging up on Monday. Investors anticipate a rise in currency volatility after the Fed updates the market on its monetary policy later in the week.
Cryptocurrencies reflected the risk-off sentiment in the rest of the world. Bitcoin declined 1.4% to $114,814.91, and ether was down 2.7%, at $4,224.07. The pullback followed a powerful advance in recent weeks, and traders were booking profits ahead of the Fed meeting.
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