(Bloomberg) — Oil markets were in focus following President Donald Trump’s meeting with Ukrainian President Volodymyr Zelenskiy, as traders weighed the potential implications for regional stability and energy flows.
Crude oil held steady after Monday’s gain, as Trump said he began arranging a meeting between Russian President Vladimir Putin and Zelenskiy. Asian stocks may struggle for direction at the open after the S&P 500 closed little changed. The yield on 10-year Treasuries rose two basis points on Monday, while the Bloomberg Dollar Spot Index added 0.2%.
Intel Corp. slid the most in more than three weeks on reports the Trump administration may take a 10% stake. SoftBank Group said it will invest $2 billion in Intel common stock.
West Texas Intermediate traded near $63 a barrel after rising 1% in the previous session. Talks on ending the war have ramped up recently, injecting uncertainty into the market. Oil is more than 10% lower this year due to concerns about the fallout from US trade policies and the outlook for oversupply.
Trump called Putin and urged the Russian leader to begin making plans for a summit with Zelenskiy, after meeting the Ukrainian president and European leaders at the White House on Monday.
The proposal — which Trump pitched as a one-on-one summit between Ukraine and Russia’s leaders that would be followed by a trilateral gathering involving all three — represented the latest turn in the US president’s push to broker a quick end to a conflict that has lasted over three years.
Also, a big week is coming up as the Federal Reserve’s annual Economic Policy Symposium kicks off Thursday in Jackson Hole, Wyoming. The event in the Grand Teton mountains has been used by Fed chairs as a venue for making crucial policy announcements.
Jerome Powell is expected on Friday to unveil the Fed’s new policy framework — the strategy it’ll use to achieve its inflation and employment goals. He may also drop some hints about the Fed’s thinking ahead of its September policy meeting.
“For now, the market appears to be betting that signs of labor-market weakness will outweigh inflation risk in the Fed’s rate-cutting debate,” said Chris Larkin at E*Trade from Morgan Stanley.
Powell’s Jackson Hole speech will be the focal point this week, with the nature of the debate shifting from whether the Fed will cut rates to how much and how quickly, according to Jason Pride and Michael Reynolds at Glenmede.
“The stars are aligning for a September rate cut; inflation remains relatively restrained and the labor market is beginning to show early signs of weakness,” they said.
Bond markets have been tempted to think it’s already a lock. Two-year Treasury yields have plunged this month as traders swung toward pricing in a quarter-point reduction in September.
Those bets took off after the unexpectedly bad July employment report, which also revised payrolls for the prior months downward. And they’ve only been dialed back slightly in the light of last week’s inflation surprise.
“If the Fed is going to cut next month, expect hints out of this week’s Jackson Hole Symposium,” said Scott Wren at Wells Fargo Investment Institute.
Interest-rate swaps show a roughly 80% chance that the Fed will lower rates next month by 25 basis points, with two cuts fully priced in by the end of the year.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:34 a.m. Tokyo time Hang Seng futures rose 0.1% S&P/ASX 200 futures fell 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1663 The Japanese yen was little changed at 147.97 per dollar The offshore yuan was little changed at 7.1877 per dollar The Australian dollar was little changed at $0.6490 Cryptocurrencies
Bitcoin fell 0.1% to $116,303.22 Ether fell 0.2% to $4,324.84 Bonds
Australia’s 10-year yield advanced three basis points to 4.30% Commodities
West Texas Intermediate crude fell 0.2% to $63.32 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
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