19/08/2024 Daily Reports
Global markets started the week on a cautious note after last week’s strong rally, as investors anticipate a softer landing for the U.S. economy, with growth expected to continue at a 2%-3% pace. U.S. futures showed slight gains, while Japan’s Nikkei remained flat after its impressive 9% surge last week.
The euro held steady above $1.1000, and the British pound reached a one-month high at $1.2953. Federal Reserve officials hinted at possible easing in September, with futures fully pricing in a quarter-point cut and partially expecting a 50 basis point reduction. All eyes are on the upcoming U.S. payrolls report and Fed Chair Jerome Powell’s speech at Jackson Hole later this week.
Meanwhile, markets anticipate a Riksbank rate cut, with speculation on whether it will be 25 or 50 basis points. Japan’s upcoming consumer price report could spark renewed discussions of a Bank of Japan rate hike.
Key events to watch include the Riksbank’s policy meeting, ECB’s Olli Rehn’s speech in New York, and a speech by Federal Reserve Governor Christopher Waller.
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Asian stocks advanced on Monday, driven by a surge in Hong Kong technology shares and optimism about potential US interest rate cuts.
The region’s currencies, including the yen, also strengthened against the dollar.
The MSCI Asia Index posted its best weekly performance in over a year, buoyed by JD.com’s strong results.
Investors are closely watching central bank meetings in Asia and awaiting Federal Reserve Chairman Jerome Powell’s speech later this week for further insights into US monetary policy.
Meanwhile, oil prices declined amid Middle East tensions, and gold remained near its all-time high.
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Wall Street is betting that Federal Reserve Chair Jerome Powell will confirm that interest-rate cuts are coming at the central bank’s annual confab in Jackson Hole, Wyoming. But as the debate shifts from “will they or won’t they?” to “how big will they go?” — stock traders may be left wanting.
Just as bond traders grow more assured that inflation is finally under control, a camp of investors is quietly building up protection against the risk of a future spike in prices. These fund managers are amassing positions that would cushion fixed-income returns in the event of an inflation shock. Wall Street strategists are also recommending taking advantage of declines in market-based gauges of future inflation to build up protection on the cheap.
All eyes will turn to the mountains of Wyoming in this week for the Federal Reserve’s Jackson Hole symposium. The highlight will come Friday, when Fed Chair Jerome Powell speaks about the economic outlook in a keynote address at 10 a.m. New York time.
