A paucity of data this week most likely will lead to a choppy, sentiment driven markets.
A continuation of weak American consumer behaviour sentiment illustrated by poor retail sales last week is not helping risk assets. Demand is slowing as the pandemic refuses to die.
In fact, Covid numbers are increasing in the States but, paradoxically, this is likely to be good for stocks since it increases the likelihood of greater government stimulus.
The world economy is also fretting about Afghanistan, port closures in China and rising cost and accessibility of freight. All of which has resulted in a stronger USD (although it has given back some gains from the end of last week) on safe haven demand.
The Federal Reserve’s Jackson Hole symposium occurs in the latter part of the week and it’s likely that Powell will repeat himself and say that tapering may occur by year end but that is dependent on the labour market. Given that assumption then we are unlikely to see big moves and the FX option continues to show low expectations of volatility.
Commodities continue to look soft but as seems to be the case this year once the selling is complete we bounce back when the bargain hunters jump back in, leading to a pretty volatile short-term market. However, we don’t yet seem to have found the base for some commodities.
Date | Country | Figures | Expected | Previous |
Aug 25 | USA | Durable Goods July | -0.2% | 0.9% |
| USA | EIA Crude Oil Stocks | -3.234M |
|
Aug 26 | USA | Initial Jobless Claims | 350K | 348K |
| USA | GDP Q2 | 6.7% | 6.5% |
| USA | Jackson Hole Symposium |
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