1. Face time
Shuttle diplomacy is in full swing with US President Donald Trump set to meet Russia’s Vladimir Putin in the coming days – the first face-to-face summit between a sitting US president and his Russian counterpart since Joe Biden met Putin in June 2021. Trump – who has veered between admiration and Sharp Criticism of Putin – Is Looking For A Breakthrough to End The 3-1/2 Year War in Ukraine After Voicing Mounting Frustration With His Russian counterpart and the threat of new sanctions.
Volgifications of the meeting will probably rim through worldwide markets with secondary rates that harm Russia and other countries around the world. Trump has imposed an extra rate of 25% on Indian goods, referring to the continuous import of Russian oil and warned that China could be the following.
In the meantime, Ukrainian President Volodymyr Zenskiy is insisting on Europe to be involved in the peace process and conversations.
2. China trade
Further progress has been made in making a trade agreement between Washington and Beijing, or Trump and his Finance Minister Scott Bessent have said.
But the deadline of 12 August for a rate view between the world’s two economic super powers is getting closer. Trump still has to sign the dotted line after both parties agreed to look for an extension of a break about rates during the discussions in Stockholm.
Yet things seem to be somewhat positive for the time being. Trump has said that he would meet Chinese President Xi Jinping before the end of the year if a trade agreement is concluded.
In the meantime, investors crave more clarity, stay largely on the sidelines and have Chinese markets largely in reach, although shares ended the week near a highest point in 10 months.
3. Test for fed bets
Bet bets that the American Fed is prepared for resuming the reduction of interest rates will be tested by the release of Tuesday’s American inflation data.
The consumer price index in July will also be viewed for signs of the impact of Trump’s rates that feed more price increases. Data in June showed the largest increase in five months, because higher costs began to bite for some goods.
A hot number could shake the story that the Fed will lower rates during the next meeting in September, which steam collected after a surprisingly weak employment report earlier this month.
The inflation report is also one of the most important releases of US economic data, because Trump has dismissed the head of the Bureau of Labor Statistics after the weak job report – a movement that caused the fear of data integrity and credibility.
4. Separate ways
The central banks of Australia and Norway have been the two most careful in developed economies in this cycle of tariff reductions, but markets think that their following movements can see them deviate.
The reserve Bank of Australia only started to relax this year and has only made two 25 BPS cuts from the peak of 2024, compared to a cumulative 100 BPS for the FED and 200 BPS for the ECB. The Central Bank of Norway has made only one 25 bps cut.
In Australia, where inflation grew at the slowest pace in four years in the three months to June, markets expect a reduction of 25 BPS on Tuesday with one or maybe two of such austerity that follow this year.
The Norges Bank, on the other hand, will remain on hold on Thursday, with another cut not completely priced until November.
However, be nervous with market prices, however, during their last meetings, both central banks confused the market expectations with Norway that achieved its one cut and Australia remains on hold.
5. It’s quiet … too quiet
In mid -August is generally seen as one of the most boring periods in the year. Legislers and central bankers have a break, there are no big data and traders use the silence to dump their screens away.
There is only one small problem. August is the habit of exploding when volatility is used – and last year was a good example. A strong valuation of the Japanese yen, combined with a decrease in American technical shares, ignited one of the largest one -day Bursts in Volatility on record.
The average daily percentage movement in the VIX volatility index in August in the last 35 years is 0.55%, the highest for each month. The least volatile month is April – even with this year’s collapse after the announcement of Trump of his “Liberation Day” rates – with an average daily move of 0.07%.
With shares at record highs and positioning in things like the stretched dollar, there is no shortage of Tripwires.
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