Caution reigns ahead of Jackson Hole

LONDON — European markets rose on Thursday as global investors await the start of the US Federal ReserveJackson Hole Economic Symposium.

The pan-European Stoxx 600 index gained 0.6% by mid-morning, with oil and gas stocks adding 1.6% to lead the gains as all sectors and major exchanges moved into positive territory except retail, which gained 0.6%.

The Fed’s annual symposium kicks off Thursday, with Chairman Jerome Powell scheduled to deliver a speech on Friday. Investors will be on the lookout for information on the central bank’s monetary tightening path as it seeks to contain inflation, and whether interest rate cuts are in sight at the end of the current cycle.

Luke Bartholomew, Senior Economist at Abrdnsaid Powell could use the speech to deliver a “mea culpa” on his prediction a year ago that inflation would be “transient” and to demonstrate what the Fed has learned about price pressures in the course of the past year.

“Powell is likely to point out that politics still has a long way to go before the Fed feels comfortable having decisively turned the corner on restoring price stability. market has behaved recently as if the Fed has moved away from its hawkish stance,” Bartholomew said in an email Wednesday.

“It’s hard to believe that Fed leadership is comfortable with how much more accommodative financial conditions have become after last month, and so Powell will use this speech as an opportunity to push back against this more accommodative interpretation of Fed policy that has popped up recently.”

US Stock Futures surged in early premarket trading on Thursday, after Wall Street snapped a three-day losing streak on Wednesday.

Investors in the United States will also be watching closely Thursday’s weekly jobless claims data and Friday’s PCE (personal consumption expenditure) reading, one of the Fed’s favorite inflation measures.

Asia Pacific Equities Thursday, while Hong Kong’s morning session was canceled due to a typhoon warning.

On the data front in Europe, Germany’s Ifo Institute business climate and expectations surveys and final second-quarter GDP figures for Europe’s largest economy were released on Thursday.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top