FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
ETX Capital information and reviews
ETX Capital
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1765
BTC/USD
47 783.36
GBP/USD
1.3798
USD/JPY
109.7150
USD/CHF
0.9275
USD/CAD
1.2684
EUR/JPY
129.0813

Markets turn cautious in wait for Powell


26 August 2021

Rising virus cases in Asia as well as lingering concerns about China’s punitive crackdown on its tech industry came back to haunt markets on Thursday, pulling regional stocks lower. European bourses also slipped at the open and US stock futures struggled too, indicating Wall Street won’t be able to repeat its run of record closes. The S&P 500 posted its second straight day of an all-time high on Wednesday and the Nasdaq indices their third. But while it is the fast-spreading Delta variant and uncertainty about Chinese regulation that are causing angst in Asia, elsewhere, it’s more likely the general caution ahead of Chair Powell’s keynote address tomorrow at the Fed’s Jackson Hole symposium that’s taken the wind out of stock markets’ sails.

There have been a lot of mixed messages lately not only on the policy front from the Fed but also about how severe the economic impact will be from the worsening Delta outbreak around the world. Early signs that the Delta wave in the United States may have knocked both consumer and business confidence in August have significantly tempered expectations that the Fed will communicate a taper timeframe at its annual gathering at Jackson Hole, which was changed to a virtual event at the last minute for the second year running.

Spotlight on Powell despite low expectations

Powell is due to speak tomorrow but is unlikely to satisfy investors seeking answers about when and how the Federal Reserve will unwind its massive monthly asset purchases. The cloudier outlook due to the Delta variant means the Fed will almost certainly want to wait for the August jobs report before finalising a decision on tapering and unless the US economy were to slow quite substantially, Powell will probably aim for a November announcement.

The problem is, markets may have set their expectations too low about any surprises on Friday, but at the same time, traders are looking at Jackson Hole for some badly-needed direction. Hence, there’s a risk that something Powell says might be blown out of proportion, potentially sparking quite a bit of volatility.

Bond markets already appear to be bracing for some action. The yield on 10-year Treasury notes has edged up to a two-week high. A series of Treasury auctions this week could be contributing to the rise in yields, as well as the improvement in risk sentiment, but some of the upward pressure could be down to speculation that the Fed will cite further progress towards its criteria for tapering on Friday.

Dollar crawls higher amid some risk-off

Firmer Treasury yields are likely propping up the US dollar, which fell back yesterday after a strong start but is now crawling higher again. The dollar index was last quoted up 0.15%, pressuring its peers. A mostly stronger Japanese yen suggests there are some risk-off trades at play that could also be aiding the greenback today. The Australian and New Zealand dollars were the worst performers as the two countries remain gripped by stringent lockdowns with virus cases still rising.

The euro was down slightly at $1.1760 ahead of the publication of the ECB accounts of the July policy meeting at 11:30 GMT. The only other major releases later today are the second estimate of US GDP for the second quarter and the weekly jobless claims.

By XM.com

#source

Related

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Sentiment sours as the S&P 500 tests key support
Sentiment sours as the S&P 500 tests key support

We head to quadruple witching in the US on Friday and notably options expiration (OPEX), and the weakness we see time and again in the week before seems...

15 Sep 2021

Dollar unscathed by soft inflation, equities resume slide
Dollar unscathed by soft inflation, equities resume slide

Dollar takes little damage despite signs US inflation has peaked - Wall Street resumes selloff - all eyes on China contagion risks - Canadian data coming up ahead of elections, gold wakes up...

15 Sep 2021

US inflation under the microscope
US inflation under the microscope

With the Fed having almost locked in a November taper announcement, the question now is whether Chairman Powell will use next week’s policy meeting to give the markets...

14 Sep 2021

Wall Street loses altitude. Dollar grinds higher
Wall Street loses altitude. Dollar grinds higher

The relentless rally in US stock markets took a breather last week. Wall Street suffered a rare pullback as investors took some profits off the table, positioning...

13 Sep 2021


Forex Forecasts

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.