What matters in U.S. and global markets today |
By Dhara Ranasinghe, European Financial Markets Editor |
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After Donald Trump and Russian President Vladimir Putin's gathering in Alaska, it's now Ukraine President Volodymyr Zelenskiy and European leaders’ turn to . They’re all gathering on Monday to map out a peace deal to end the war in Ukraine.
Unsurprisingly, the response from financial markets to Friday's has been muted, to say the least. Oil prices, the euro and Ukraine's bonds are little changed. |
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The fear (from Europe) is that Trump could try to pressure Kyiv into accepting a settlement favourable to Moscow. has already all but rejected the outline of Putin's proposals, including for Ukraine to give up the rest of its eastern Donetsk region, of which it currently controls a quarter.
- Analysts reckon a ceasefire remains some way off, meaning geopolitical tensions remain a potential headwind to otherwise pretty buoyant world stock markets.
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Markets will likely be on alert for any sign of deterioration in Trump’s further talks with Putin. Especially those that might prompt the U.S. president to impose secondary tariffs targeting Russian energy trading, say with India. In an opinion piece published in Monday's Financial Times, White House trade adviser said India's Russian crude buying was funding Moscow's war in Ukraine and had to stop.
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Trump's meeting with Zelenskiy in Washington is one key gathering markets have their eye on this week. The other, the Federal Reserve's annual central bank conference in Jackson Hole, Wyoming, takes place later this week. Fed chief Jerome Powell's speech there on Friday is expected to be his before his term ends next May.
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In Mike Dolan’s column today, he looks at what could |
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Ukraine's Volodymyr Zelenskiy and European leaders will meet in Washington on Monday to map out a peace deal amid fears the U.S. president could
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India aims to slash taxes on small cars and insurance premiums as part of a of its goods and services tax (GST), a government source said on Monday, as
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Hong Kong's debt-laden developers and their creditors are set to face intensifying financial pressure as bond maturities are slated to jump by nearly 70% next year
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China's refiners lifted their processing rates in July, they are still likely adding to their stockpiles, which will allow them to trim imports should prices rise to levels they
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News that Chinese battery giant CATL has suspended operations at its giant Jianxiawo mine has lit a fire under the lithium market,
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Eerily calm credit markets face pockets of concern: Mike Dolan |
Like much of the financial markets universe, U.S. corporate credit has enjoyed smooth sailing through the summer, helped along by the much diminished recession risks, decent corporate earnings growth, and the prospect of another round of Federal Reserve easing. It's almost too calm. Investors even seem comfortable with the riskier names in the junk bond world, with spreads on the lowest ratings tier - CCC and below - comfortably under the long-term average. |
The loan market has also come back to life after three years of slow growth and April's tariff-related turbulence. It has expanded 5% year-to-date to almost $1.5 trillion, with brisk new borrowing in July totaling $54 billion, excluding repricings, outstripping the post-2022 average, according to Morgan Stanley's leveraged loans team.
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What could go wrong? For a start, the Fed may reasonably view all this as evidence of a well-oiled credit world that, on top of other indicators, has created the loosest financial conditions in three years. With inflation still relatively hot, it may conclude it doesn't need to ease quickly to stoke more borrowing, despite the intense political pressure.
And there are also pockets of concern that investors are monitoring closely, including consumer-facing sectors that may quickly feel the pinch from tariff-induced price rises or from cash-strapped graduates facing the end of the student loan payment moratorium.
On that latter point, New York Fed research showed a spike in student debt delinquencies in the second quarter. |
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Graphics are produced by Reuters.
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Although stock markets across the globe are at or near world highs, analysts say a ceasefire scenario is not yet priced in.
So if there was any sign of a movement in that direction, risk assets - especially |
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