US Dollar (USD) roaring out of the gate ahead of US Federal Reserve.
The US Dollar (USD) already roaring out of the gate ahead of US Federal Reserve (Fed) Chair Jerome Powell’s long-awaited address at the Jackson Hole Symposium in Wyoming later this Friday. Already ahead of the announcement, the greenback is gaining ground versus every major peer from the G10 currencies, as multiple Fed officials have reiterated the same message in recent days: stable for longer.
Markets have priced in potential early reduction and now anticipate a first cut in May 2024.
Despite Michigan Consumer Sentiment and Inflation ExpectationsOn the macroeconomic data front, anticipate Powell’s speech to be the only talk in town and the key market moving event on Friday. Volatility will rise early on Friday as additional central bank speakers hit the stage in Jackson Hole.
Daily summary;The US dollar has dropped from its highs.
As of 14:00 GMT, the following headlines are likely to emerge from the Jackson Hole Symposium: US Fed Chair Jerome Powell will deliver his keynote speech at 14:00. The Fed’s Patrick Harker will talk next at 15:00 GMT, joining Loretta Mester. Austan Goolsbee of the Federal Reserve will take the stage at 18:00 GMT. Loretta Mester of the Federal Reserve is scheduled to talk again in half an hour. at 18:30. Christine Lagarde of the European Central Bank (ECB) will talk at 21:00 GMT to close up the week.
Furthermore Michigan Consumer Sentiment for August will be released at 14:00 GMT. The Index is projected to remain at 71.2. The inflation rate is also predicted to remain constant at 2.9%.
Germany’s Gross Domestic Product (GDP) remains unchanged at 0%, causing the Euro to fall.
The People’s Bank of China (PBoC) did it again, fixing the Yuan at 7.1883 against the projected 7.2826. Meanwhile, the Chinese government has requested that banks curb certain Connect Bond outflows and relax mortgage regulations for property purchasers.
Moreover ECB member Joachim Nagel, though, believes a rate halt is premature. The ECB requires additional information for its September decision. Following these remarks, ECB member Boris Vujcic stated that inflation has peaked and the eurozone economy is stalling.
On this Friday, equities are a mixed bag: Asian equities are falling, with the Japanese Topix down -0.88%. The Hang Seng index in Hong Kong is down -1.29%. For the time being, European equities and US futures remain flat.
According to the CME Group FedWatch Tool, markets are pricing in an 80.5% possibility that the Federal Reserve will hold interest rates steady at its September meeting. This is the lowest level in weeks, as markets begin to fear another rate rise.
After reaching 4.25%, the benchmark 10-year US Treasury note yield now trades at 4.25%.On Monday, the annual high was 4.3618%. The bond market will be extremely sensitive to any news from the Jackson Hole Symposium on Friday. The whole US yield curve might swing up or down based on Fed Chair Jerome Powell’s remarks.
