- After Jackson Hole, there was speculation that the ECB could be more hawkish than the Fed during its upcoming decision
- There were suggestions from ECB members that there could be a 75 basis point hike and a significant acceleration of QT, or balance sheet reduction!
- During Jackson Hole, ECB members were said to have hinted that they would like to see a reduction in the balance sheet
- In addition, there was a marked drop in gas prices today, due to the 83% filling of German gas storage facilities. The filling of storage facilities is higher than previously expected. Prices fell sharply below €300/MWh today
- In addition to the drop in gas prices, there was the first limit to the rise in energy prices in Europe
- Declines in energy prices in Europe led the EURUSD to go above parity, but later retested this key level
- US gas prices retreated, testing the $9 area
- In turn, oil went sharply above $100 per barrel, despite news from the IEA that further reductions in reserves may continue
- Wall Street retreats further and continues the sell-off started after Powell's speech. Indices lose more than 1% amid rising expectations for US rate hikes
- Gold is trying to return to the $1,740 area, benefiting from the strength of the euro against the dollar. On the other hand, the dollar remains strong in the market, primarily against currencies with lower interest rates (JPY)
- The current expectation is that there could be a 75bp hike before the Fed in September, but there is also a scenario of 3 hikes of 50bp, which would bring the main rate down to 4%
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
