European shares muted as markets await Ukraine talks
The pan-European STOXX 600 index closed 0.1% up, after logging a second straight weekly gain on Friday.
Ukraine's Volodymyr Zelenskiy will meet Trump along with other European leaders in a bid to draw out a peace deal that will not favour Moscow.
Trump met with his Russian counterpart Vladimir Putin on Friday and agreed that a peace deal should be worked upon without a ceasefire.
Europe's index tracking aerospace and defence stocks was up 0.7%, after falling in the last session. UK's Babcock gained 5.2% after RBC initiated the engineering company at 'Outperform'.
'If we can get to a peace agreement, the market would likely take that positively, but it remains unclear at this stage, given that the two sides seem quite far apart,' said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.
'We don't have a lot of clarity on how they (important market catalysts) might turn out, so the market has been quite directionless.'
Most sectors on the benchmark STOXX 600 were lower, with a 1.6% and 0.5% decline in miners and heavyweight banks weighing the most.
Novo Nordisk jumped 6.6% after the drugmaker's weight-loss drug Wegovy received an accelerated approval by the US Food and Drug Administration to treat a serious liver condition.
Separately, it announced it was offering its diabetes drug Ozempic for $499 per month to eligible patients in the US
The gains boosted the healthcare sector up 1.4%, logging its eighth session of gains. The sector took a beating this year, on uncertainty around Trump's pharma tariffs, but is making a recovery.
Most regional bourses also closed lower, while UK's FTSE 100 managed to eke out a 0.2% gain.
The Federal Reserve's annual Jackson Hole symposium later this week will be in focus, where Chair Jerome Powell and other policymakers will talk economic outlook and the central bank's policy framework.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 hours ago
- Business Recorder
Dollar drifts as investors ponder Fed independence ahead of Powell speech
SINGAPORE: The US dollar drifted on Thursday as investors fretted about the Federal Reserve's independence after yet another attack from President Donald Trump ahead of remarks from Chair Jerome Powell later this week that could influence the outlook for rates. Trump called on Fed Governor Lisa Cook to resign on the basis of allegations made by one of his political allies about mortgages she holds in Michigan and Georgia, intensifying his effort to gain influence over the U.S. central bank. Cook said she had 'no intention of being bullied to step down' from her position at the central bank. Trump has also told aides he is considering trying to fire Cook, the Wall Street Journal reported on Wednesday. 'It has the potential to raise questions around the Fed's oversight and regulatory functions but it has little to no near-term monetary policy implications,' said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. That explained the relatively muted reaction in the currency markets to the news as the dollar initially dipped on the news but was mostly calm into the Asian session. The Japanese yen held onto gains made in previous sessions and was little changed at 147.41 per dollar, while the euro was steady at $1.1642. Sterling last fetched $1.34535. That left the dollar index , which measures the U.S. currency against six other peers, steady at 98.301. Trump has repeatedly criticised Powell for being too slow to cut rates, stoking investor worries about the central bank's independence and its credibility. Investors expect Trump will replace Powell with a more dovish appointment when his term ends in May. Trump earlier this month said he would nominate Council of Economic Advisers Chairman Stephen Miran to serve out the final few months of a vacant Fed seat after Adriana Kugler unexpectedly resigned. Kristina Clifton, a senior economist at the Commonwealth Bank of Australia in Sydney, said if Cook resigns it would create another opening for Trump to appoint a Fed Governor who will vote to lower interest rates. 'Perceived political interference in the Federal Reserve can undermine its independence, steepening the yield curve and denting the USD's safe haven status.' Powell speech The main focus this week has been on whether Powell will push back against market expectations for a rate cut at the Fed's September 16-17 meeting when he speaks on Friday at the Jackson Hole meeting, following a weak jobs report for July. 'Markets are adamant that recent labour market data necessitates some policy calibration and are expecting Chair Powell to tip his hat in that direction,' TD's Newnaha said. Traders are pricing in an 82% chance of a 25-basis-point rate cut next month, CME FedWatch tool showed. While the odds have lowered from last week after hotter than expected producer price inflation tempered expectations, investors are still pricing in over 50 bps of easing this year. Some analysts cautioned that markets could end up being disappointed by Powell's speech, noting that the impact of Trump's tariffs on inflation remains uncertain. 'It is not clear that Powell will deliver strong guidance,' said Benoit Anne, managing director in the investment solutions group at MFS Investment Management. If the dovish signals elude us, there will be significant pricing out of the odds for a September cut.' In other currencies, the New Zealand dollar was nursing steep overnight losses at $0.58205 after diving 1.2% to its lowest level since April. New Zealand's central bank cut interest rates on Wednesday as expected but left the door wide open to yet more easing if needed. The Australian dollar eased 0.13% to $0.64245, hovering near a two-week low.
Business Recorder
2 hours ago
- Business Recorder
Oil prices gain as US inventory withdrawals point to strong demand
TOKYO: Oil prices gained slightly on Thursday as larger-than-expected declines crude oil and fuel inventories in the U.S., the world's biggest oil user, supported expectations for steady demand. Brent crude futures were up 13 cents, or 0.19%, to $66.97 a barrel at 0055 GMT, after gaining 1.6% in the previous session. U.S. West Texas Intermediate (WTI) crude futures rose 15 cents, or 0.24%, to $62.86, after climbing 1.4% on Wednesday. U.S. crude inventories fell by 6 million barrels last week to 420.7 million barrels, the U.S. Energy Information Administration said on Wednesday, versus analysts' expectations in a Reuters poll for a 1.8 million-barrel draw. , Gasoline stocks dropped by 2.7 million barrels, versus expectations for a 915,000-barrel draw, the EIA said, indicating steady driving demand during the summer travel season. That was also seen in a jump in the four-week average for jet fuel consumption to its highest since 2019. 'Crude oil prices rebounded as signs of strong demand in the U.S. boosted sentiment,' Daniel Hynes, senior commodity strategist at ANZ, said in a note on Thursday. Still, Hynes cautioned that some 'bearish sentiment remains evident as traders continue to monitor negotiations to end Russia's war against Ukraine.' Russia said on Wednesday attempts to resolve security issues relating to Ukraine without Moscow's participation were a 'road to nowhere,' as U.S. and European military planners have begun exploring post-conflict security guarantees for Ukraine. The drawn-out efforts to secure peace in Ukraine mean that Western sanctions on Russian oil supply continue to remain in place. The possibility of further U.S. sanctions and tariffs on Russian oil buyers also hang over the market. Russia, however, remains adamant it will keep providing crude to willing buyers, with Russian diplomats in India saying on Wednesday the country expects to continue supplying oil to India despite warnings from the U.S. U.S. President Donald Trump has announced an additional tariff of 25% on Indian goods from August 27 because of their Russian crude purchases. The European Union has also sanctioned Indian private refiner Nayara Energy, which is backed by Russian oil company Rosneft. Indian refiners initially backed off their Russian buying but company officials at state-run Indian Oil and Bharat Petroleum have bought Russian oil for September and October delivery, resuming purchases after discounts widened.
Business Recorder
2 hours ago
- Business Recorder
Dollar drifts, Asian stocks mixed as markets brace for Jackson Hole
TOKYO: The US dollar hovered below a one-week high on Thursday and Asian stock markets were broadly mixed as investors braced for three days of potentially market-moving news from the Federal Reserve's annual symposium in Jackson Hole. Central bankers from around the world will attend the event, which begins later in the day, although the key focus will be Fed Chair Jerome Powell's speech on Friday as traders look for clues on the chances of a September rate cut. Japan's Nikkei drooped 0.6% in the morning session, retreating further from the record peak reached on Tuesday. Despite a tech-led selloff on Wall Street overnight, Japanese chip stocks were a mixed bag, with Advantest up 3% while Tokyo Electron dropped 2%. South Korea's KOSPI bounced 0.9% after dipping to a six-week low on Wednesday. Australia's benchmark gained 0.6% and renewed an all-time high. Mainland Chinese blue chips gained 0.5%, although Hong Kong's Hang Seng was largely flat. U.S. stock futures pointed lower, with Nasdaq futures sagging 0.2% and S&P 500 futures easing 0.1%. Overnight, the Nasdaq Composite slid 0.7% and the S&P 500 cash index slipped 0.2%. 'There remains a bearish skew for equities at the moment,' said Kyle Rodda, an analyst at 'Equity prices are beginning to reflect the risk of disappointment at Jackson Hole, with doubts circulating about whether the Fed will pivot as aggressively in the dovish direction implied by rates markets - or even pivot at all.' Traders currently lay odds of about 80% for a quarter-point Fed rate cut on September 17, and price in a total of 52 basis points of easing over the rest of the year. This time on Wednesday, the odds for a cut next month stood at 84%. Fed Chair Powell has said he is reluctant to cut rates because of expected tariff-driven price pressures this summer. Minutes out overnight from the Fed's July gathering, when policymakers voted to keep rates steady, suggested that Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller were alone in pushing for a rate cut at the meeting. Traders ramped up bets for a September cut following a surprisingly weak payrolls report at the start of this month, and were further encouraged after consumer price data showed limited upward pressure from tariffs. However, a hotter-than-expected producer price reading last week complicated the policy picture. Traders aren't looking at macroeconomic data as the only potential influencer of monetary policy direction, with President Donald Trump again exerting pressure on the central bank overnight. After continuing his attacks on Powell earlier in the week for refraining from cutting rates, Trump on Wednesday targeted Fed Governor Lisa Cook, demanding she resign amid allegations of wrongdoing connected to mortgages on properties she owns in Georgia and Michigan. Cook said she had 'no intention of being bullied to step down'. Trump's push for more control over the Fed unnerved investors earlier in the year, sending the dollar tumbling. The currency has largely taken the latest developments in stride though, and the dollar index was steady at 98.252 on Thursday, after grinding to the highest since August 12 at 98.441 a day earlier. 'The broader implication is rising tensions between the Fed and the U.S. administration,' said Rodrigo Catril, a strategist at National Australia Bank. 'Trump's push to confirm Stephen Miran could add another vote for cuts in September, and if he was to successfully remove Cook, the Fed Board could end up with four members out of seven supporting his lower rates call.' Trump nominated Council of Economic Advisers Chair Miran as a Fed governor earlier this month, following the surprise resignation of Adriana Kugler. U.S. 10-year Treasury yields were steady at 4.2965% in the latest session. Japanese government bond yields edged higher though, with the 20-year yield advancing to 2.655% for the first time since late 1999. Among other things, investors are wary of increased fiscal spending amid growing pressure for the Japanese prime minister to step down. The dollar traded little changed at 147.41 yen . The euro and sterling were flat at $1.1647 and $1.3458, respectively. Bitcoin continued to claw its way back from a 2-1/2-week low reached Wednesday at $112,386.93, edging up to around $114,690. Gold eased slightly to around $3,342 per ounce. Oil prices edged higher as larger-than-expected declines in crude oil and fuel inventories in the U.S. supported expectations for steady demand. Brent crude futures were up 0.5% to $67.19 a barrel, after gaining 1.6% in the previous session. U.S. West Texas Intermediate (WTI) crude futures rose 0.6% to $63.10, after climbing 1.4% on Wednesday.
