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SYDNEY, August 18, 2025 — Asian share markets posted modest gains on Monday, buoyed by investor optimism ahead of a pivotal week for U.S. monetary policy. Meanwhile, oil prices dipped slightly as concerns over Russian supply disruptions appeared to ease.
🏦 Focus on U.S. Federal Reserve Policy
Market participants are closely watching the upcoming Jackson Hole symposium, hosted by the Kansas City Federal Reserve from August 21–23. Federal Reserve Chair Jerome Powell is expected to deliver remarks on the economic outlook and the central bank’s policy trajectory.
Economists anticipate Powell will signal that inflation and employment risks are beginning to balance, potentially paving the way for a return to a neutral policy stance. However, he is unlikely to commit to a rate cut before the release of August’s employment and inflation data.
Futures markets currently imply an 85% probability of a quarter-point rate cut at the Fed’s September 17 meeting, with expectations for further easing by year-end.
📊 Regional Market Performance
- Japan’s Nikkei index rose 0.9%, reaching a fresh record high.
- Chinese blue-chip stocks gained 1.0%, extending quarterly gains to nearly 8%.
- MSCI’s broadest index of Asia-Pacific shares outside Japan was slightly lower after hitting a four-year peak last week.
European futures also pointed to a positive open:
- EUROSTOXX 50 futures up 0.3%
- FTSE and DAX futures gained 0.2% each
U.S. futures remained firm, with the S&P 500 and Nasdaq both hovering near all-time highs. Strong corporate earnings have supported valuations, particularly among mega-cap technology firms. Analysts at Goldman Sachs noted that the “Magnificent 7” tech companies posted a 26% year-over-year EPS growth in Q2, beating consensus expectations by 12%.
🛢️ Oil Prices Slip as Geopolitical Tensions Ease
Crude oil prices declined slightly following signals that geopolitical tensions surrounding Russian energy exports may be softening. Brent crude fell 0.4% to $65.61 per barrel, while U.S. West Texas Intermediate eased 0.2% to $62.67.
The shift comes after U.S. President Donald Trump met with Russian President Vladimir Putin in Alaska, reportedly aligning more closely with Moscow’s push for a peace deal in Ukraine. Further discussions with Ukrainian President Volodymyr Zelensky and European leaders are scheduled for later this week.
💬 Currency and Bond Markets
The U.S. dollar remained defensive, slipping 0.4% against a basket of currencies last week. It held steady against the yen at 147.33 and traded at $1.1704 against the euro.
In bond markets, expectations of Fed easing have kept short-term Treasury yields subdued, while long-term yields remain elevated due to concerns over stagflation and rising budget deficits. European bond yields also climbed amid increased defense spending projections.
