Morning Call: Equities wilt on fading US-China hopes
Senior Editor, Saxo Bank
Summary: Equities are heading south as hopes for a breakthrough in China-US trade talks disappear over the horizon. Elsewhere, macroeconomic worries are weighing on crude oil and both CAD and SEK have weakened sharply against the dollar.
FX Update: Powell speech at Jackson Hole to set the tone for weeks
Fed Chair Powell set to deliver a pivotal speech today at the Jackson Hole, Wyoming central banker powwow. Little indicates that Powell is set to open the easing floodgates, which may disappoint bond markets and see the USD pulling higher still. We should all shield our eyes and ears for the ensuing Trump reaction if so.
Traders anxiously await Jackson Hole
Ahead of the annual Jackson Hole Economic Symposium chairman Powell is once again juggling with market expectations whilst facing an ever-oppositional barrage of insults from an irate US President Donald Trump. Asian indexes nervously climbed today on low volumes ahead of tonight’s speech and yields rose along with the USD as Fed officials reigned in the dovish cooing. Markets are nervy as they attempt to navigate ongoing trade tensions, geopolitical fractures and a synchronised slowdown in global growth. Pervasive uncertainty remains and as such traders are anxiously looking to the Fed for direction as chairman Powell delivers his opening speech at the symposium tonight in Wyoming.
FX Update: USD rebounds on tone deaf FOMC minutes
The FOMC minutes yesterday offered little comfort that the Powell Fed is ready to bring more up-front easing. Markets weren’t particularly reactive to the development, but the USD has bobbed back higher and could head higher still if Powell fails to deliver the right degree of dovishness at tomorrow’s Jackson Hole speech.
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