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Markets are Hesitant until the Fed’s Jackson Hole Speech


The US stocks little rallied on Wednesday, stock traders remained hesitant to make any huge wagers ahead of Jerome Powell’s speech on Friday, which may provide clues on how hawkish the Federal Reserve will be in the face of mounting economic challenges. In the run-up to the all-important Jackson Hole annual conference that will be attended by policymakers around the world, investors had to digest more hawkish talk, as it’s probably that Fed officials need to tighten and bring inflation back under control. Besides, economic data have been mixed at best, US pending home sales fell to the lowest since the start of the pandemic, underlining the delicate task policymakers face in bringing down high inflation without sparking a recession.

The benchmarks, both S&P500 and Dow Jones Industrial Average notched a small gain on Wednesday, with its swing capped within 1% for the second day in a row. All eleven sectors in S&P500 stayed in positive territory, as the Energy sector performed the best among all groups, which rose 1.20% for the day. It’s worth noting that Tesla Inc. pared most of its rally ahead of a split-adjusted basis on Aug.25, which caused the Nasdaq to little moved upward with a 0.3% gain on daily basis. The Dow Jone Industrial Average rose 0.2%, and the MSCI world index was little changed on Wednesday.

Main Pairs Movement

The US dollar was little changed on Wednesday, as investors put into sideways for a Friday speech by the Federal Reserve chairman for fresh clues on how aggressive the central bank will be in its battle against inflation. The DXY index slowly climbed up to a daily high level above 109, then witnessed huge selling transactions and fell to a level below 108.4 during the US trading session.

The GBP/USD declined with a 0.31% loss daily for the day, as investors were cautious ahead of Jackson Hole Symposium. The cables were weighed in the first half of Wednesday, then observed upbeat traction at the beginning of the US trading session and touched a daily high level of around 1.188. Meantime, EUR/USD touched a level of nearly 1.000. The pair was little changed down on Wednesday.

Gold advanced with a 0.17% upward for the day, as a two-day uptrend. XAU/USD surged during the US trading session and oscillate in a range from $1,744 to $1,756 marks. WTI and Brent oil surged on Wednesday, rising by 1.23% and 1.55% on daily basis respectively.

Economic Data  

CurrencyDataTime (GMT + 8)Forecast
EURGerman GDP (QoQ) (Q2)14:000.0%
EURGerman Ifo Business Climate Index (Aug)16:0086.8
EURECB Publishes Account of Monetary Policy Meeting19:30 
USDGDP (QoQ) (Q2)20:30-0.8%
USDInitial Jobless Claims20:30253k