Calm trading as investors watch Fed signals and U.S. moves on Nvidia chip exports to China.
Global markets were subdued on Tuesday as traders focused on the upcoming U.S. Federal Reserve meeting and Washington’s decision to allow Nvidia’s second-best AI chips to be exported to China with a 25% fee.
The calm pause followed days of a global bond selloff. Reuters reported that markets also reacted to the Reserve Bank of Australia’s decision to keep rates unchanged while warning that its next move could be a hike if inflation persists, a signal that lifted the Australian dollar to a near three-month high.
Nvidia shares rose about 2% in premarket trade, but Chinese tech stocks fell, with Hong Kong’s Hang Seng Tech Index dropping nearly 2%.
Currency markets were stable. The euro traded at $1.1649, sterling edged up to $1.3347, and the yen held around 156.1 per dollar after initially weakening following Monday’s powerful earthquake in Japan.
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More central bank decisions are due this week. The Bank of Canada and Swiss National Bank are expected to hold rates, while the European Central Bank meets next week. Comments by ECB board member Isabel Schnabel — signalling the next eurozone rate move is more likely to be upward, pushed German and U.S. yields sharply higher on Monday.
Bond markets eased slightly on Tuesday, with Germany’s 10-year yield at 2.84% and the U.S. 10-year Treasury at 4.15%.
Shares were calm in Europe and the U.S., though Asian markets slipped. Rising concerns about Japan’s fiscal position continue to push Japanese government bond yields higher, creating a tense backdrop for the Fed meeting that concludes Wednesday. A 25-basis-point cut is expected, but analysts warn the tone of Chair Jerome Powell, potential dissents, and new economic projections could surprise markets.
Analyst Erica Camilleri told Reuters that investors are also watching whether the next Fed chair will support further rate cuts or resist pressure from President Trump for looser policy. Trump’s top economic adviser and Fed chair contender, Kevin Hassett has publicly argued for continued rate reductions.
Oil prices stabilised after falling 2% on Monday as traders monitored peace talks on Russia’s war in Ukraine. Brent crude slipped to $62.3 a barrel while U.S. WTI edged down to $58.69.
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