Global stocks near record highs as markets await Trump-Putin talks
The MSCI All Country World Index (.MIWD00000PUS), opens new tab consolidated recent gains as European stocks edged higher in early trading (.STOXX), opens new tab. The index was last up 0.2% at 953.4, just shy of the record level of 954.21 set on Wednesday.
Wall Street futures were also up slightly around 0.1-0.2%. ,
The White House has said the Trump-Putin meeting will take place at 11 a.m. Alaska time (1900 GMT), with the U.S. president's hopes of a ceasefire agreement on Ukraine uncertain. Trump has said a second summit involving Ukrainian President Volodymyr Zelenskiy could follow if the talks go well.
"There's still a small degree of risk premium in European markets because of the war. Any type of resolution will ultimately pare that back," said Shaniel Ramjee, co-head of multi-asset at Pictet Asset Management, adding that oil and other commodity prices could also react.
"But I think that the market has learnt not to expect too much from these negotiations. Ultimately, Zelenskiy and the Europeans are not invited. They will need to be involved in any final negotiation."
Investors are also training their sights on U.S. retail data due later, after an unexpected spike in producer price data on Thursday renewed inflation concerns and pared market expectations for Federal Reserve rate cuts this year.
"What it did was to get rid of all the chat about a 50 basis point cut (in September)," said Mike Houlahan, director at Electus Financial Ltd in Auckland.
The 10-year U.S. Treasury yield was flat at 4.287%, after the previous day's 5 basis point rise in the aftermath of the PPI data.
The dollar index , which tracks the greenback against a basket of six major currencies, was last trading down 0.2% at 97.965.
Japanese GDP data released on Friday showed the economy expanding by an annualised 1.0% in the April-June quarter, beating analyst estimates. The dollar weakened 0.4% against the yen to 147.16 .
In commodities markets, Brent crude was down 0.7% at $63.52 per barrel. Gold edged up 0.2% to $3,342 per ounce.
Cryptocurrency markets stabilised after bitcoin touched a record $124,480.82 on Thursday. The digital currency was last up 0.9%.
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Reuters
an hour ago
- Reuters
Shares nudge higher in Asia, oil slips on truce talks
SYDNEY, Aug 18 (Reuters) - Share markets edged higher in Asia on Monday ahead of what is likely to be an eventful week for U.S. interest rate policy, while oil prices slipped as risks to Russian supplies seemed to fade a little. U.S. President Donald Trump now seemed more aligned with Moscow on seeking a peace deal with Ukraine instead of a ceasefire first, after meeting Russian President Vladimir Putin in Alaska on Friday. Trump will meet Ukrainian President Volodymyr Zelenskiy and European leaders later on Monday to discuss the next steps, though actual proposals are vague as yet. The major economic event of the week will be the Kansas City Federal Reserve'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. "Chair Powell will likely signal that risks to the employment and inflation mandates are coming into balance, setting up the Fed to resume returning policy rate to neutral," said Andrew Hollenhorst, chief economist at Citi Research. "But Powell will stop short of explicitly signalling a September rate cut, awaiting the August jobs and inflation reports," he added. "This would be fairly neutral for markets already fully pricing a September cut." Markets imply around an 85% chance of a quarter-point rate cut at the Fed's meeting on September 17, and are priced for a further easing by December. The prospect of lower borrowing costs globally have underpinned stock markets and Japan's Nikkei (.N225), opens new tab firmed 0.5% to a fresh record high. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab was a fraction lower, having hit a four-year top last week. EUROSTOXX 50 futures rose 0.3%, while FTSE futures and DAX futures gained 0.2%. S&P 500 futures nudged up 0.1%, while Nasdaq futures added 0.2% with both near all-time highs. Valuations have been underpinned by a solid earnings season as S&P 500 EPS grew 11% on the year and 58% of companies raised their full-year guidance. "Earnings results have continued to be exceptional for the mega-cap tech companies," noted analysts at Goldman Sachs. "While Nvidia has yet to report, the Magnificent 7 apparently grew EPS by 26% year/year in 2Q, a 12% beat relative to consensus expectation coming into earnings season." This week's results will provide some colour on the health of consumer spending with Home Depot, Target, Lowe's and Walmart all reporting. In bond markets, the chance of Fed easing is keeping down short term Treasury yields while the longer end is pressured by the risk of stagflation and giant budget deficits, leading to the steepest yield curve since 2021. European bonds also have been pressured by the prospect of increased borrowing to fund defence spending, pushing German long-term yields to 14-year highs. Wagers on more Fed easing has weighed on the dollar, which dropped 0.4% against a basket of currencies last week to last stand at 97.851 . The dollar was a fraction firmer on the yen at 147.33 , while the euro held at $1.1704 after adding 0.5% last week. The dollar has fared better against its New Zealand counterpart as the country's central bank is widely expected to cut rates to 3.0% on Wednesday. In commodity markets, gold was stuck at $3,328 an ounce after losing 1.9% last week. Oil prices struggled as Trump backed away from threats to place more restrictions on Russian oil exports. Brent dropped 0.4% to $65.61 a barrel, while U.S. crude eased 0.2% to $62.67 per barrel.
Reuters
an hour ago
- Reuters
Oil falls on easing Russia supply concerns after Trump-Putin meet
SINGAPORE, Aug 18 (Reuters) - Oil prices slipped on Monday as the U.S. did not exert more pressure on Russia to end the Ukraine war by implementing further measures to disrupt Russian oil exports after the presidents from both countries met on Friday. Brent crude futures dropped 26 cents, or 0.39%, to $65.59 a barrel by 0028 GMT while U.S. West Texas Intermediate crude was at $62.62 a barrel, down 18 cents, or 0.29%. U.S. President Donald Trump met Russian President Vladimir Putin in Alaska on Friday and emerged more aligned with Moscow on seeking a peace deal instead of a ceasefire first. Trump will meet Ukrainian President Volodymyr Zelenskiy and European leaders on Monday to strike a quick peace deal to end Europe's deadliest war in 80 years. The U.S. president said on Friday he did not immediately need to consider retaliatory tariffs on countries such as China for buying Russian oil but might have to "in two or three weeks", cooling concerns about a disruption in Russian supply. China, the world's biggest oil importer is the largest Russian oil buyer followed by India. "What was primarily in play were the secondary tariffs targeting the key importers of Russian energy, and President Trump has indeed indicated that he will pause pursuing incremental action on this front, at least for China," RBC Capital analyst Helima Croft said in a note. "The status quo remains largely intact for now," Croft said, adding that Moscow will not walk back on territorial demands while Ukraine and some European leaders will balk at the land-for-peace deal. Investors are also watching Federal Reserve Chairman Colin Powell's comments at the Jackson Hole meeting this week to search for clues on the path of interest rate cuts that could boost stocks to more record highs. "It's likely he will remain non-committal and data-dependent, especially with one more payroll and CPI (Consumer Price Index) report before the September 17th FOMC meeting," IG market analyst Tony Sycamore said in a note.
BBC News
2 hours ago
- BBC News
Should Europe wean itself off US tech?
Imagine if US President Donald Trump could flip a switch and turn off Europe's may sound far-fetched, crazy even. But it's a scenario that has been seriously discussed in tech industry and policy circles in recent months, as tensions with Washington have escalated, and concerns about the EU's reliance on American technology have come to the the root of these concerns is the fact just three US giants - Google, Microsoft and Amazon - provide 70% of Europe's cloud-computing infrastructure, the scaffolding on which many online services some question whether an unpredictable US leader would weaponize the situation if relations seriously deteriorated - for example, by ordering those companies to turn off their services in Europe."Critical data would become inaccessible, websites would go dark, and essential state services like hospital IT systems would be thrown into chaos," says Robin Berjon, a digital governance specialist who advises EU believes that concerns over a so called US "kill switch" should be taken seriously. "It's hard to say how much trouble we would be in." Microsoft, Google and Amazon all say they offer "sovereign" cloud computing solutions that safeguard EU clients' data, and would prevent such a scenario ever occurring. The BBC has contacted the US Treasury department for truth, there have always been concerns about the lack of "digital sovereignty" in Europe, where US firms not only dominate the cloud-computing market, but also hardware, satellite internet and now artificial the region's main mobile operating systems - Apple and Android - and payment networks - Mastercard and Visa - are fears became urgent in May when it emerged that Karim Khan, the top prosecutor at the Netherlands-based International Criminal Court (ICC), had lost access to his Microsoft Outlook email account after being sanctioned by the White ICC has issued arrest warrants for top Israeli officials, including Prime Minister Benjamin Netanyahu, over their roles in the Israel-Gaza war - something Mr Trump called "illegitimate".Khan has since temporarily stepped aside until a sexual misconduct probe against him is says that "at no point" did it cease or suspend its services to the ICC, although it was in touch with the ICC "throughout the process that resulted in the disconnection". Since then digital sovereignty has shot up the agenda in Brussels, while some public bodies are already seeking alternatives to US is it realistic to think they could wean themselves off US technology?Digital sovereignty is loosely defined as the ability of a governing body to control the data and technology systems within its problem faced by those pursuing it is the lack of comparable does have its own providers, such as France's OVHCloud, or Germany's Germany's T-Systems or Delos, in cloud they account for a fraction of the market, and don't have the same scale or range of capabilities, says Dario Maisto, a senior analyst covering digital sovereignty at global business consultancy open-source alternatives are available for common software packages like Office and Windows, but while proponents say they are more transparent and accessible, none is as comprehensive or well known. But while moving to sovereign alternatives wouldn't "happen overnight", it's a "myth" to think it's not possible, says Mr notes that the German state of Schleswig-Holstein is currently in the process of phasing out Microsoft products like Office 365 and Windows in favour of open-source solutions such as LibreOffice and Linux. Denmark's Ministry for Digitalisation is piloting a similar scheme."We sometimes overvalue the role of proprietary software in our organisations," Mr Maisto says, pointing out that for key services like word processing and email, open-source solutions work just fine."The main reasons organisations don't use open source are a lack of awareness and misplaced fears about cyber security," he adds."Our prediction is in the next five to 10 years, there will be an accelerated shift [to these solutions] because of this wake-up call." Benjamin Revcolevschi, boss of OVHCloud, tells the BBC that firms like his are ready to answer the sovereignty needs of public and private organisations in Europe."Only European cloud providers, whose headquarters are in the EU and with European governance, are able to offer immunity to non-European laws, to protect sensitive and personal data," he Microsoft, Amazon and Google say they already offer solutions that address concerns about digital sovereignty, solutions which store data on severs in the clients' country or region, not in the tells the BBC that it also partners with trusted local EU suppliers like T-Systems, granting them control over the encryption of client data, and giving customers "a technical veto over their data". The German Army is one of its Microsoft president Brad Smith has promised the firm would take legal action in the "exceedingly unlikely" event the US government ordered it to suspend services, and that it would include a clause in European contracts to that effect."We will continue to look for new ways to ensure the European Commission and our European customers have the options and assurances they need to operate with confidence," a Microsoft spokesman told the BBC. Zach Meyers, from the Brussels-based Centre on Regulation in Europe (CERRE) think tank, says it might make sense for Europe to develop its own limited sovereign cloud to protect critical government he adds that it's unrealistic to try to "get Americans out of the supply chain, or to ensure that there's Europeans in the supply chain at each point".He points to Gaia X - a scheme launched in 2020 to create a European-based alternative to large, centralised cloud platforms, which has faced significant criticism and delays."A lot of these [tech] markets are winner takes all, so once you're the first mover it's really hard for anyone else to catch up."Instead, Mr Meyers thinks Europe should focus on areas of technology where it might gain an edge."It could be the industrial use of AI, because Europe already has a much bigger, stronger industrial base than the US has," he says. "Or the next generation of chipmaking equipment, because one of the few areas where Europe has foothold is in photolithography - the machines that make the really top-end chips." So where does the digital sovereignty agenda go from here?Some believe nothing will change unless Europe brings in new regulations that force regional organisations and governments to buy local technology. But according to Mr Berjon, the EU has been dragging its feet."There is definitely political interest, but it's a question of turning it into a shared strategy."Matthias Bauer, director at the European Centre for International Political Economy, thinks the goal should be building up Europe's technology sector so it can compete with the US and a report on EU competitiveness in 2024, Mario Draghi, former head of the European Central Bank, noted Europe is "severely lagging behind" in new technologies, and that "only four of the world's top 50 tech companies are European"."It's currently much harder for a tech company based in the EU to scale across the bloc than it would be for the same company in the US," Mr Bauer says."You not only face different languages, but different contract law, labour market laws, tax laws, and also different sector-specific regulation."As for the theory that President Trump might flip a "kill switch" and turn off Europe's internet, he's highly sceptical."It would be a realistic scenario if we were close to a war, but I don't see that on the horizon."Yet Mr Maisto says organisations must take the risk seriously, however remote."Two years ago, we didn't think we would be talking about these topics in these terms in 2025. Now organisations want to get ready for what might happen."
