Markets Hold Breath as FOMC Minutes Loom Amid Ongoing Geopolitical Tensions

Global markets are expected to remain cautious this week as investors assess the U.S. Federal Reserve's monetary policy direction and geopolitical risks, despite relief from easing inflation concerns.

The July Consumer Price Index (CPI) rose 3.4% year-over-year, matching market expectations, while the Producer Price Index showed a stable trend, alleviating pressure on the Fed to tighten further.

However, experts caution that it's too early to dismiss concerns about monetary tightening, and the July FOMC minutes are expected to be a key inflection point for equities this week. The minutes will reveal the strength of dissenting opinions on rate hikes, along with Fed members' assessments of inflation and economic conditions.

Kim Yu-mi, an analyst at Kiwoom Securities, noted that through the July FOMC minutes, it's necessary to confirm the divergence of views among Fed members regarding inflation and economic outlook. If a hawkish stance is strongly confirmed in the minutes, it could exert upward pressure on Treasury yields.