With UK markets closed for the August bank holiday on Monday, global markets were mixed following Federal Reserve Chairman Jerome Powell’s speech to the Central Bankers Symposium in Jackson Hole on Friday.
Powell said the “time has come” to cut U.S. interest rates, a relief for those waiting for a cut in U.S. Treasury rates.
The governor said the bank would be closely watching for further warning signs of a slowing labor market, but said he was confident the 2 percent inflation target was within reach.
“The direction is clear and the timing and pace of rate cuts will depend on upcoming data, changing outlook and the balance of risks,” he said.
US Markets on Friday
Markets rose following Friday’s speech, with the three major indexes closing up more than 1%.
The Dow (^DJI) and S&P 500 (^GSPC) rose 1.2%, while the tech-heavy Nasdaq (^IXIC) closed up 1.5%.
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Futures suggested a less enthusiastic open after the near-record close.
Trade in Europe
European markets were mixed on Monday, with Germany’s DAX index (^GDAXI) opening down 0.2% and France’s CAC 40 index (^FCHI) up 0.2%.
Meanwhile, the pan-European STOXX 600 (^STOXX) was broadly unchanged.
Traders weighed risks and focused on the Middle East conflict, with weekend attacks by Israel and Hezbollah sending oil prices higher. Crude oil futures contracts (CL=F) rose to $75.63 a barrel, about 1% higher in London on Monday morning than the previous trading day.
Monday trading in Asia
Asia’s major stock indexes moved in different directions early on Monday, with Japan’s Nikkei (^N225) down 0.7% and the Hang Seng Index (^HSI) up 1.1%.
Japanese stocks fell after the yen strengthened against the dollar and the Bank of Japan’s governor hinted at further interest rate hikes, and also said the bank was closely watching big fluctuations in stock prices.
Meanwhile, the People’s Bank of China kept its one-year policy lending rate unchanged at 2.3 percent following a 0.2 percentage point cut in July, another sign that one of the world’s growth engines is treading cautiously with policy.
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