Markets Wait for Jackson Hole

Market Drivers August 26, 2020

  • Quiet night in equities and FX
  • All eyes on Powell
  • Nikkei 0.03% Dax 0.71%
  • UST 10Y 0.70
  • Oil $43
  • Gold $1919/oz
  • BTCUSD $1375

Asia and the EU

  • No data

North America Open

  • USD Durable Goods 8:30

Markets were very quiet on the second day of the trading week with equities holding a mild bid while the dollar was essentially flat.

Both the newsflow and economic release calendar were barren with price action reflecting the dog days of summer listlessness as many market participants remained on holiday.

The only point of focus this week will be Chairman’s Powell speech at the virtual Jackson Hole central bank summit with most market players anticipating that he will maintain a dovish tilt to his remarks.

The key point of interest is whether the Fed will make explicit its shift from a single rate inflation targeting of about 2% to an average inflation rate which would in effect allow it to run the economy “hot” for much longer than under the former policy regime.

A move towards average inflation targeting indicates that monetary policy will remain highly accommodative for quite some time which should provide further support for equities – especially high technology companies that are enjoying the benefits of ultra-low capital cost structures and continued organic growth.

On the eco calendar in North America today the market will see Durable goods orders which are expected to slow from the month prior but remain positive. Unless the number prints way outside of the consensus it’s unlikely to have any impact on trade and the only question for the day ahead is whether the current momentum flows can push equities to fresh highs ahead of Chairman Powell’s speech tomorrow.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Boris Schlossberg

Mr. Schlossberg is a regular contributor to CNBC's Squawk Box and a commentator for CNBC Asia and CNBC Europe. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Mr. Schlossberg has written for SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is the author of Technical Analysis of the Currency Market and Millionaire Traders: How Everyday People Beat Wall Street at its Own Game, both of which are published by Wiley

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