Oil climbed to a 3-week high. The NZD fell to a 4-month low against the US dollar

On Monday, the Dow Jones (US30) fell by 0.77%, the S&P 500 (US500) was down 0.43%, and the tech-heavy Nasdaq (US100) closed 0.31% lower. The US stocks had a mixed day, with a clear divide between sectors as markets re-evaluated the scale of potential Fed rate cuts and the impact of tariffs on manufacturers. On Friday, Fed Chair Powell noted that a softening labor market could justify a rate cut at the Fed’s September meeting if employment and price data don’t bring any surprises. However, concerns about high inflation, voiced by other members of the Federal Open Market Committee (FOMC), prevented a sharper rally in the stock markets.

European stock markets declined on Monday. The German DAX (DE40) fell by 0.37%, the French CAC 40 (FR40) closed 1.59% lower, the Spanish IBEX35 (ES35) dropped 0.85%, while the British FTSE 100 (UK100) was not trading. European equities closed lower, pulling back from gains made the previous week as markets continued to assess the global rate outlook and recent corporate news. The banking sector saw a sharp decline, with BBVA and BNP Paribas losing 2% and 3.5% respectively, and UniCredit down 0.4% after converting its synthetic position in Commerzbank into physical shares.

WTI crude oil prices rose by more than 1.5% on Monday to $64.70 per barrel, their highest level in nearly three weeks, as traders continued a four-day rally to weigh geopolitical risks and monetary policy signals. Prices were supported by fears of supply disruptions from Russia after new Ukrainian drone strikes on energy infrastructure, including a fire at an export terminal in Ust-Luga and another at the Novoshakhtinsk oil refinery. Uncertainty over stalled peace talks and US President Trump’s threat to impose new sanctions on Russia and raise tariffs on Indian imports also heightened supply concerns.

Platinum prices held above the $1,350 per ounce mark on Monday after rising for three consecutive sessions, supported by dovish signals on US Fed monetary policy. The metal gained momentum after Fed Chair Jerome Powell’s Jackson Hole speech on Friday, where he indicated that the Central Bank would likely cut interest rates at its next meeting. Markets are currently pricing in an 87% probability of a 25 basis point rate cut in September, up from 75% last week. Additional support came from expectations of a supply cut, as global platinum output is expected to decline slightly this year, primarily due to reduced production in South Africa and Russia amid operational issues, mine closures, aging infrastructure, and cost-cutting measures. On the demand side, platinum’s long-term outlook remains positive, driven by the growth of hydrogen fuel cells and broader green energy adoption.

Asian markets were mostly up on Monday. Japan’s Nikkei 225 (JP225) rose by 0.41%, China’s FTSE China A50 (CHA50) climbed 3.91%, Hong Kong’s Hang Seng (HK50) was up 1.94%, and Australia’s ASX 200 (AU200) closed 0.06% higher.

On Tuesday, the Australian dollar hovered around $0.648 as investors weighed the latest Reserve Bank of Australia (RBA) meeting minutes. The Central Bank indicated that further interest rate cuts are likely over the coming year, with the pace of easing depending on incoming economic data. At its August 2025 meeting, the RBA Board lowered the cash rate by 25 basis points to 3.6%, citing ongoing progress in bringing inflation closer to the mid-point of its 2-3% target range. Markets now expect the RBA to hold rates in September, with a possibility of another cut in November. Longer-term, rates are anticipated to potentially reach 3.10% or even 2.85%.

The New Zealand dollar fell to $0.584 on Tuesday, returning to a four-month low amid trade risks and expectations of further rate cuts from the Reserve Bank. Sentiment weakened after US President Trump threatened China with high tariffs on rare-earth exports and warned of duties on countries supporting digital taxes, which increased risk aversion and put pressure on commodity-linked currencies. The RBNZ’s rate cut last week and its signal of more easing ahead, citing domestic and global growth risks, added further pressure. Markets are now pricing in an almost 50% chance of another rate cut in October and a full cut by November. However, losses were partially offset by a weaker US dollar after Trump’s dismissal of Fed official Lisa Cook over alleged mortgage fraud raised concerns about the Central Bank’s independence.