Asian stocks broadly strengthened on Monday ahead of key central bank decisions in the region this week and the annual meeting at Jackson Hole.

A gauge for the region’s stocks edged higher, extending Friday’s gains. Equity markets in Japan fluctuated, while those in Australia edged lower. US futures contracts were up in early Asian trading after the S&P 500 rose 0.2% on Friday. The dollar was little changed, while Treasury yields advanced.

The calm start to the week comes ahead of US jobless claims and economic activity data, while Jerome Powell is expected to confirm Federal Reserve interest-rate cuts are on the cards when he speaks in Wyoming. The meeting caps a volatile period for global stocks, partially driven by concern the Fed wouldn’t reduce borrowing costs fast enough to prevent a deeper US slowdown.

“Financial markets will be sensitive to his every word,” Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note. “We expect Powell to green light a cut on 19 September, but we expect Powell to retain optionality for delayed cuts or larger cuts subject to the next CPI and payrolls.”

Goldman Sachs at the weekend trimmed the probability of a US recession in the next year to 20% from 25%, citing last week’s retail sales and jobless claims data. If the August jobs report set for release on Sept. 6 “looks reasonably good, we would probably cut our recession probability back to 15%,” Goldman economists led by Jan Hatzius wrote in a report to clients on Saturday.

In Asia this week, investors will be looking to central bank meetings in Indonesia and South Korea for signs of policy easing, while the Thailand decision will be crucial following reports the nation’s new prime minister may abandon a key stimulus package.

Bank of Japan Governor Kazuo Ueda is scheduled to attend a special session at Japan’s parliament this week to likely discuss the July 31 rate hike, which roiled global markets. Meanwhile, hedge funds have turned bullish on Japan’s currency for the first time since 2021, marking a sharp turnaround from the extremely negative sentiment seen among these traders as recently as early July.

In China, authorities are expected to keep the 1- and 5-year loan prime rates steady after the People’s Bank of China last week pledged further steps to support economic recovery, while cautioning that it won’t be adopting “drastic” measures.

In commodities, oil declined for the fourth time in five sessions as traders tracked US-led efforts to secure a cease-fire in the 10-month old Middle East, while the Russia-Ukraine war is escalating. Gold topped $2,500 on hopes the Fed is edging closer to cutting rates. Elsewhere, iron-ore had it worst week since early June on concern that a steel-industry crisis rippling across China will sap demand, while supplies from miners remain robust.

“How markets trade the stock markets around another “quiet” week for data, filled with more central bank decisions and guidance will be important in setting up the tone for a more hectic month end,” said Bob Savage, head of markets strategy and insights at BNY. “Further, expect the week ahead to be dominated by the unknowns of politics and geopolitics.”

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