According to analysts at ING, for global markets, the key line from Fed Chair Powell’s Jackson Hole speech was “we have seen no clear sign of an acceleration above 2 percent, and there does not seem to be an elevated risk of overheating”.
Key Quotes
“This provided some modest support for global risk sentiment – not least as investors can take some comfort in the fact that the Federal Reserve is unlikely to accelerate their current policy tightening plans.”
“The lack of fresh Fed impetus comes at a time when the dollar is running out of positive catalysts – domestic political uncertainties (Trump and Cohen), Trump jawboning, fading positive US data surprises, extreme long USD positioning means that we think the broad dollar index has most likely put in a short-term cyclical top now.”
“We’ll be closely watching US leading indicators (Chicago PMI and Dallas Fed indices) in the week; the theme for regional US activity indices so far has been a decline in new orders as trade uncertainties weigh. Other data points to note are US consumer confidence (Tue), the second release of 2Q US GDP (Wed), core PCE inflation (Thu) and University of Michigan Sentiment index.”
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