[Global News Digest – August 21, 2025] Preconditions for Ukraine Ceasefire, Gaza 60-Day Proposal, Eurozone PMI Rise, Oil Rebound on Inventory Drop, Markets Ahead of Jackson Hole

This article summarizes key global developments on Thursday, August 21, 2025 (JST), in the format: Highlights → Market Impact → Forecast. It covers essential SEO keywords such as Ukraine ceasefire, Gaza truce, crude oil, Eurozone PMI, FOMC minutes, Jackson Hole, China LPR, Japan exports. Reference links are listed at the end.

1) Ukraine: Turkey Emphasizes “Ceasefire First”; Security Guarantees Still Under Discussion

• Highlights: A Turkish defense official stated that a ceasefire must come first before any peacekeeping or security framework can be designed. Meanwhile, the US, EU, and Ukraine continue talks in Washington to formalize security guarantees, as Moscow reiterates that excluding Russia renders talks meaningless.
• Impact: Continued investment expected in European air defense and grid resilience. Geopolitical premiums likely to persist in EU gas and power markets.
• Forecast: With no clear ceasefire path yet, expect limited, phased agreements (funding, logistics, air defense systems) to proceed first.

2) Gaza: 60-Day Ceasefire Proposal Under Review, As Israel Begins New Gaza Operation

• Highlights: Hamas reportedly accepted the 60-day ceasefire proposal, with the US reviewing the terms. Meanwhile, Israel launched an initial phase of operations in Gaza City. The UN warns that aid levels remain insufficient to prevent famine.
• Impact: Marine insurance and crude oil premiums remain highly sensitive to headlines. Expansion of humanitarian corridors may help reduce energy market volatility.
• Forecast: A phased ceasefire + inspection protocol remains the most viable path. A breakdown risks further insurance and shipping cost spikes.

3) Europe: August PMI Hits 15-Month High – Manufacturing Expands for First Time in Over 3 Years

• Highlights: Eurozone composite PMI rose to its highest level since May 2024, with new orders recovering and manufacturing returning to expansion territory. Some price pressures are reemerging.
• Impact: Expectations for further ECB easing are reduced; EUR remains firm. However, sticky services inflation supports the case for rate hold.
• Forecast: ECB is likely to hold rates for now. Rate differentials and tariff concerns between the US and EU may drive rotation between cyclical and defensive sectors.

4) Crude Oil: Inventories Drop 6 Million Barrels; Prices Rebound, Still Range-Bound in Upper $60s

• Highlights: EIA reported a significant inventory draw, lifting Brent to ~$66.9 and WTI to ~$62.8. Still, Ukraine peace hopes vs. uncertainty continue to pull prices in both directions.
• Impact: Fuel cost relief supports consumption and logistics in importing countries. Neutral-to-negative for oil producers and energy equities.
• Forecast: Market remains sensitive to ceasefire headlines and OPEC+ output shifts. Base scenario: prices range-bound in low to upper $60s.

5) U.S. Monetary Policy: FOMC Minutes Caution Against Rate Cuts; Jackson Hole in Focus

• Highlights: July FOMC minutes showed few members favored immediate rate cuts. Focus now turns to Jackson Hole, where the Fed may reassess policy strategy. Gold dipped slightly on dollar strength.
• Impact: U.S. rates, dollar, and tech stocks remain highly reactive. Fading rate-cut hopes could be a headwind for growth stocks.
• Forecast: Chair Powell’s speech will shape September rate cut expectations. Dual confirmation from labor and retail data will be key.

6) China: LPR Hold Confirmed (1Y at 3.00%, 5Y at 3.50%) – Targeted Support Continues

• Highlights: China’s decision to hold LPR rates aligned with expectations. Beijing remains committed to selective support, like refinancing lines for SMEs and disaster-hit areas, rather than broad stimulus.
• Impact: Real estate recovery remains slow. Capital continues flowing into EVs, solar, and battery sectors.
• Forecast: Expect ongoing industry policies tied to restructuring and consolidation in sectors facing overcapacity.

7) Japan: July Exports Drop More Than Expected; Nikkei Retreats From Highs

• Highlights: July exports declined year-on-year, missing forecasts as U.S. tariffs hit auto exports. Asian markets were mixed, with the Nikkei pulling back after hitting record highs.
• Impact: Yen, tariffs, and energy costs will be key drivers of corporate earnings. For exporters, local production and hedging are now valuation criteria.
• Forecast: With global trade uncertainty lingering, Japanese firms must accelerate supply chain diversification (China+1 / US+1) and revise pricing strategies.

Summary: Near-Term Market Drivers & Practical Takeaways

• Key Drivers:

  1. Preconditions for ceasefire (Turkey’s comments / Russia’s warnings)
  2. Fate of Gaza’s 60-day truce proposal
  3. Eurozone PMI improvement and ECB rate hold outlook
  4. Crude inventory draw and sustained range-bound oil prices
  5. FOMC minutes × Jackson Hole messaging

• Actionable Measures:

  1. Reassess tariff/FX/energy exposure by product category (pass-through, alt sourcing, inventory LT).
  2. Hedge energy volatility via long-term contracts + energy efficiency + BESS investment.
  3. For European markets, advance pipelines in defense, power grid, and distributed energy sectors.
  4. Prepare for post-Jackson Hole volatility with FX/interest rate/tech sector hedging.

Reference Links (Primary Sources & Data)

• Turkey: “Ceasefire First” for Ukraine Peace
  https://www.reuters.com/world/middle-east/turkey-says-any-ukraine-peacekeeping-hinges-first-ceasefire-2025-08-21/
• Zelenskiy: Security Framework in 10 Days
  https://www.reuters.com/world/europe/zelenskiy-says-security-guarantees-ukraine-be-worked-out-within-10-days-2025-08-19/
• Israel Launches Gaza Operation (Phase One)
  https://www.reuters.com/world/middle-east/israel-calls-up-tens-thousands-reservists-before-new-gaza-offensive-2025-08-20/
• U.S. Discussing Latest Gaza Truce Plan
  https://www.reuters.com/world/middle-east/us-discussing-latest-gaza-ceasefire-proposal-white-house-says-2025-08-19/
• Eurozone PMI Accelerates in August
  https://www.reuters.com/world/europe/euro-zone-business-activity-accelerates-august-new-orders-grow-pmi-shows-2025-08-21/
• Oil Rebounds on Inventory Draw / Demand Signals
  https://www.reuters.com/business/energy/oil-prices-gain-us-inventory-withdrawals-point-strong-demand-2025-08-21/
  https://www.reuters.com/business/energy/oil-rises-1-signs-strong-demand-russia-ukraine-peace-uncertainty-2025-08-21/
• FOMC Minutes (July) – Limited Rate Cut Support
  https://www.reuters.com/business/fed-dissenters-appeared-alone-favoring-rate-cut-july-meeting-minutes-show-2025-08-20/
• Jackson Hole: Fed Policy Strategy Under Review
  https://www.reuters.com/world/us/feds-expansive-experiment-strategy-get-reboot-jackson-hole-2025-08-21/
  https://www.reuters.com/business/how-fed-chair-powell-has-used-jackson-hole-signal-whats-next-2025-08-21/
• China LPR Hold (3.00% / 3.50%) Confirmed
  https://www.reuters.com/markets/europe/china-leaves-benchmark-lending-rates-unchanged-matching-forecast-2025-08-20/
• Japan July Export Decline (Below Forecast)
  https://www.reuters.com/markets/asia/japans-exports-fall-more-than-expected-july-us-tariff-pressures-2025-08-20/
• Asia Market Update – Nikkei Retreats
  https://www.reuters.com/world/china/global-markets-wrapup-2-2025-08-21/