- Stock indices muted ahead of Jackson Hole symposium
- US GDP growth slightly below expectations. Jobless claims on the rise
- ECB minutes signals no major policy shift
This week it's all about the Jackson Hole symposium. The event gained renown thanks to the statements of Ben Bernanke during his term of office. On the other hand, Jackson Hole usually coincided with major economic events. In fact, it is the media that pumped up expectations about this event, although it is still not entirely certain whether Powell will decide to take any action. There are many indications that the anticipated speech by Powell may disappoint the markets, although recent statements from bankers such as George, Kaplan and Bullard indicate that the Fed may indeed be getting ready to start the tapering. Does it matter for the stock market? Or maybe starting this process will affect the dollar and gold? We encourage you to read our today’s pre-event review.
Stock indices fell slightly due to uncertainty and hawkish comments from the Fed. Nevertheless, from a long-term perspective, today's pullback is not unusual.
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Create account Try a demo Download mobile app Download mobile appThe data today shows a mixed picture. On the one hand, US GDP for Q2 is slightly better compared to the original reading. On the other hand, the government's stimulus is limited. Recently, Goldman Sachs significantly reduced its GDP forecasts for the third quarter of this year, which may also be a suggestion that the Fed will postpone any actions for the time being. Still, there is a chance for a surprise.
The cryptocurrency market has improved in recent weeks. Bitcoin rose 70% from July lows, while Ethereum surged almost 100%. On the other hand, in recent days we can see that the bullish momentum has been losing strength. This market is probably also awaiting further news from the United States. Theoretically, a stronger dollar is negative information for the crypto market.
The ECB minutes did not show anything new. The central bank does not plan to introduce any significant changes in the near future. However, EURUSD remains relatively high, as Forex traders also await for tomorrow's event.
The situation in the Antipodes is not improving, which shows that the pandemic situation has not been contained and the virus can attack not only in the USA but also in Europe. Meanwhile, the Bank of Korea has decided to raise interest rates and is planning further increases due to the excessive heating of the real estate market.
Natural gas (NATGAS) price jumped nearly 7% and is currently testing major resistance at $4.20, which is the highest level since December 2018 after the EIA report showed much smaller than expected inventories built during last week's hot weather. Should break higher occur, then upward move may accelerate towards December 2018 highs at $4.90. On the other hand, if sellers manage to regain control, then nearest major support lies at $3.70 and is strengthened by 61.8 Fibonacci retracement of the last downward wave. Source: xStation5
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