Frank Kelly’s Geopolitical Week Ahead | August 18, 2024

Could there finally be a ceasefire in Gaza?

The situation in the Middle East will continue to dominate the geopolitical outlook this week as negotiations seeking a ceasefire in Gaza, and the release of hostages held by Hamas appear to have gotten closer to an agreement.  US Secretary of State Antony Blinken will travel to the region again this week – his ninth trip there this year – hoping to clinch a deal.  But ongoing fighting between Hezbollah forces and Israeli forces intensified over the weekend and risks escalating into a far larger regional fight. 

Democratic National Convention begins in Chicago

Meanwhile,  the Democratic National Convention begins in Chicago. As many as 50,000 people are expected to participate.  But the party nomination of Vice President Kamala Harris may be marred by widespread protests by activists opposed to the Biden Administration’s supportive policy for Israel in Gaza. 

Indian Prime Minister Modi makes a historic visit to Ukraine

This coming week will mark a  historic first: Indian Prime Minister Narendra Modi is expected to visit Kyiv, Ukraine to meet with Ukrainian President Volodymyr Zelensky.  Modi is seeking to play a role in helping to broker a peace deal between Ukraine and Russia, an effort that has been publicly encouraged by the US.  Modi will also visit Poland, the first time an Indian Prime Minister has visited the nation in 40 years. 

Vietnam’s new leader to visit China

Another important diplomatic trip this week is Vietnam’s new leader to Lam, making his first official visit to China and his first overseas visit as President. He will meet with President Xi Jinping, where the two leaders will likely finalize an important railroad deal and discuss ongoing tensions between the two nations over disputed territory in the South China Sea. Vietnam has been stepping up its international diplomatic and trade efforts this year, upgrading ties with the US, Japan, and India. But Vietnam also hosted Russian President Vladimir Putin in June, raising eyebrows in Tokyo, Washington, and Brussels. 

Global markets

Turning to the global markets and major economic events this coming week

• Markets will be laser-focused on Jackson Hole, Wyoming where the annual Kansas City Federal Reserve Conference will feature most of the leading international central bank chiefs. Federal Reserve Board Chair Jay Powell will give a much-anticipated speech Friday, and markets will be hoping for further indications of interest rate cuts being made at the next Federal Open Markets Committee meeting in September.
• Also, this week both the Federal Reserve and the European Central Bank will be releasing minutes from their last interest rate meetings. The ECB will also be releasing their consumer expectations survey on Friday.
• This week’s other important releases this week include PPIs out of Germany, the UK, and Eurozone, while Japan releases CPI and July trade balance figures.  Also, of note in Japan this week, the Japanese Parliament (Diet) will hold a joint Lower House and Upper House Financial Affairs Committee hearing featuring Bank of Japan Governor Kajuo Ueda and Finance Minister Shunichi Suzuki to discuss the Bank’s rate increase in July and what it might mean for Japan’s economy longer term.