As the final week of August kicks off, markets are reacting to a weekend full of key insights from the Federal Reserve’s Jackson Hole Symposium, alongside early economic data releases.
KEY INDICATORS
US Durable Goods Orders (MoM):
- New orders placed with producers for the supply of durable items that are expected to last at least three years are referred to as Durable Goods Orders in the United States.
- A higher-than-expected figure should be seen as positive (bullish) for the USD while a lower-than-expected figure should be seen as negative (bearish) for the USD.
Mixed market reactions post-Jackson Hole:
- The market opened with mixed reactions as investors processed Fed Chair Jerome Powell’s remarks from the Jackson Hole Symposium.
- Powell reaffirmed the Fed’s commitment to controlling inflation but left the door open for future rate hikes depending on economic data.
MARKET MOVERS
USD/CHF
EUR/GBP
XAU/USD
TODAY’S NEWS HEADLINES
US soft landing consistent with weaker dollar
- As the global economy grapples with uncertainties, the United States appears to be on track to achieve a “soft landing,” a scenario where the economy slows down without entering a recession.
- The expectation is that this policy move will help the economy stabilise without tipping into a full-blown recession.
- Several factors contribute to this scenario. The Fed’s potential rate cuts are a significant driver, as they can adjust real rates faster than other central banks facing downside risks to growth.
Gold prices steady above USD 2,500 amid rate cut cheer
- Spot gold fell 0.1% to USD 2,509.88 an ounce.
- Gold futures expiring in December fell 0.1% to USD 2,545.10 an ounce by 00:57 ET (04:57 GMT).
- Spot prices hit a record high of USD 2,532.05 an ounce last week.
- Other precious metals clocked some gains last week but retreated on Monday.
- Platinum futures fell 0.6% to USD 965.45 an ounce.
- Silver futures fell 0.4% to USD 30.145 an ounce.
Oil prices to remain elevated as Middle East tensions threaten a wider conflict
- Israel’s response may include an attack on Iran’s oil supply and related infrastructure, which would put at risk 3-4% of global oil supply.
- Forecasts that Brent will trade in the range of USD 75 to USD 85 per barrel in September due to diminishing prospects of a truce in Gaza and an expected Iranian retaliation against Israel.
- US West Texas Intermediate crude was up 0.75% at USD 75.39 a barrel.
- Brent crude rose 0.67% to USD 79.55.
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