Asia–Europe Equities Drift as Markets Hold Fire for Jackson Hole; Greenback Gains, Crude Stays Quiet

 

Markets across the Eastern Hemisphere offered a mixed picture on Friday, the final tune-up before the Federal Reserve’s policy narrative takes center stage at Jackson Hole. With investors finely split on whether the central bank is ready to begin cutting rates in September, risk appetite was measured. Equity moves were small, the U.S. dollar inched higher, and oil barely budged—classic pre-event positioning.
Asia set the tone. Japanese stocks rose slightly after a gentler inflation print strengthened the case for a go-slow approach from the Bank of Japan. China-linked benchmarks found better footing, with both Hong Kong and onshore indices advancing as traders leaned into cyclical and tech exposure on hopes that policy support and a stabilizing growth pulse will carry into the autumn. By contrast, Australia saw pockets of profit-taking after recent strength, and Korea’s chip-heavy market was mixed as the AI supply chain narrative toggled between optimism on long-term demand and jitters around near-term product cycles.
Europe traded in lockstep with that caution. The region’s main composite index hovered around unchanged to slightly higher as investors weighed tentative factory green shoots against the possibility that U.S. financial conditions will stay tight if the Fed declines to bless a September pivot. Germany and France posted modest gains, while the UK market paused after a stretch of record-setting sessions. Within sectors, the preference was for names with resilient cash flows and balance sheets, alongside select interest-rate sensitives that would benefit if global yields slip back after Jackson Hole.
Currencies told a consistent story. The dollar gained ground, sending the euro and the pound toward their lowest levels in roughly two weeks as traders tempered confidence in an imminent rate cut. The logic is simple: a Powell message framed around “more confirmation needed” keeps U.S. rates comparatively attractive and supports the greenback; a message tilting toward “managing two-sided risks” could draw capital back into higher-beta FX and lift non-U.S. equities.
Commodities barely flinched. Crude prices were essentially flat, poised to break a short losing streak as expectations for a quick geopolitical détente faded and supply-demand balances looked a touch tighter. Gold slipped as the firmer dollar and slightly higher real yields weighed on haven demand, though the move stayed within the narrow August range.
The upshot for global investors is that market direction is hostage to tone. A Powell speech that keeps September “in play” without over-committing would likely soften the dollar and give Asia–Europe equities a tailwind. A firmer emphasis on patience would favor the dollar and keep international benchmarks choppy but contained. With liquidity thin and positioning light, even modest rhetorical nuance could set the course into month-end.