LONDON, August 18 (Reuters) -A look at the day ahead in U.S. and global markets by Dhara Ranasinghe, European Financial Markets Editor
After Donald Trump and Russian President Vladimir Putin's gathering in Alaska, it's now Ukraine President Volodymyr Zelenskiy and European leaders’ turn to meet the U.S. President. They’re all gathering on Monday to map out a peace deal to end the war in Ukraine.
Unsurprisingly, the response from financial markets to Friday's Alaska summit has been muted, to say the least.
Oil prices, the euro and Ukraine's bonds are little changed.
* The fear (from Europe) is that Trump could try to pressure Kyiv into accepting a settlement favourable to Moscow. Zelenskiy has already all but rejected the outline of Putin's proposals, including for Ukraine to give up the rest of its eastern Donetsk region, of which it currently controls a quarter. Analysts reckon a ceasefire remains some way off, meaning geopolitical tensions remain a potential headwind to otherwise pretty buoyant world stock markets.
* Markets will likely be on alert for any sign of deterioration in Trump’s further talks with Putin. Especially those that might prompt the U.S. president to impose secondary tariffs targeting Russian energy trading, say with India. In an opinion piece published in Monday's Financial Times, White House trade adviser Peter Navarro said India's Russian crude buying was funding Moscow's war in Ukraine and had to stop.
* Trump's meeting with Zelenskiy in Washington is one key gathering markets have their eye on this week. The other, the Federal Reserve's annual central bank conference in Jackson Hole, Wyoming, takes place later this week. Fed chief Jerome Powell's speech there on Friday is expected to be his valedictory speech before his term ends next May.
In Mike Dolan’s column today, he looks at what could disturb the eerily calm credit markets.
Today's Market Minute
* Ukraine's Volodymyr Zelenskiy and European leaders will meet Donald Trump in Washington on Monday to map out a peace deal amid fears the U.S. president could try to pressure Kyiv into accepting a settlement favourable to Moscow.
* India aims to slash taxes on small cars and insurance premiums as part of a sweeping reform of its goods and services tax (GST), a government source said on Monday, as Prime Minister Narendra Modi's plan sparked a rally in stock markets.
* Hong Kong's debt-laden developers and their creditors are set to face intensifying financial pressure as bond maturities are slated to jump by nearly 70% next year amid falling sales and valuations for the city's economically crucial property sector.
* China's refiners lifted their processing rates in July, they are still likely adding to their stockpiles, which will allow them to trim imports should prices rise to levels they believe are not justified by market fundamentals.
* News that Chinese battery giant CATL has suspended operations at its giant Jianxiawo mine has lit a fire under the lithium market, writes ROI columnist Andy Home.
Chart of the day
Although stock markets across the globe are at or near world highs, analysts say a ceasefire scenario is not yet priced in.
So if there was any sign of a movement in that direction, risk assets - especially European shares - would be in a good position to rally further.
Today's events to watch
* Zelenskiy meets Trump in Washington
* U.S. bills auction
(Reporting by Dhara Ranasinghe; editing by William Maclean)
