While British markets close for the bank holiday on Monday August, global markets were mixed following US Federal Reserve Chairman Jerome Powell’s speech at the central bankers’ symposium in Jackson Hole on Friday.
Powell said the “time has come” to cut interest rates in the US – a last-ditch effort for those waiting for cheaper US debt.
He added that the bank would monitor for further warning signs of a slowdown in the labor market and that he was confident that the inflation target of two percent was achievable.
“The direction is clear and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the allocation of risks,” he said.
US markets on Friday
Following Friday’s speech, markets rose, with the three major indicators closing more than 1% higher.
The Dow (^DJI) and the S&P 500 (^GSPC) gained 1.2 percent, while the technology-heavy Nasdaq (^IXIC) closed up 1.5 percent.
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Futures pointed to a less euphoric start to trading later after the record-breaking closing prices.
Trade in Europe
European markets showed a mixed picture on Monday: The German DAX (^GDAXI) opened 0.2 percent lower and the French CAC 40 (^FCHI) rose 0.2 percent.
The pan-European STOXX 600 (^STOXX), meanwhile, remained virtually unchanged.
Traders’ attention turned to the conflict in the Middle East as they weighed the risks. Attacks by Israel and Hezbollah over the weekend have pushed up oil prices. Crude oil futures (CL=F) traded as high as $75.63 a barrel in London on Monday morning, up almost 1 percent from the previous session.
Monday trading in Asia
On Monday, the most important Asian indices moved in different directions: The Nikkei (^N225) fell 0.7 percent in Japan, while the Hang Seng (^HSI) rose 1.1 percent.
Japanese stock prices fell as the yen strengthened against the dollar and the head of the country’s central bank hinted at further interest rate hikes. He also said the bank was closely monitoring the wide swings in stock prices.
Meanwhile, the People’s Bank of China kept the interest rate on one-year policy loans at 2.3 percent, after cutting it by 0.2 percent in July, another sign of cautious policy in one of the world’s growth engines.
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