TradeTheNews.com Staff TradeTheNews.com Follow Following

- Powell's anticipated speech at the Jackson Hole symposium dominating attention as European indices trade mixed with US futures lower and a firm to steady USD. Traders looking for nuanced commentary that might indicate a change to rate path plans or dismissal of the dip in latest US CPI.

- Ahead of an extended weekend for the UK, energy regulator Ofgem announced an energy price cap increase from £1,971 to £3,549, to take place from Oct 1st for three months. Ofgem declined to give guidance on next price increase, while speculative reports now range between £5000-7200 for early 2023. UK Govt under pressure to apply financial relief to households, with comments early from Truss' spokeperson (likely next PM) stating she will implement measures immediately once in office (Sept 5th).

- Germany Aug GFK consumer confidence hits record low at -36.5, adding to statistics that show Germany lagging the Euro Zone in performance, heightening fears of recession. France Aug Consumer Confidence beat at 82 v 79 estimate.

- Asia closed mixed with Hang Seng outperforming at +0.9%. EU indices are flat to mixed, with bond yields also mixed. US futures are firmly in the red. Gold -0.4%, DXY 0.0%; Commodity: Brent +0.7%, WTI +0.8%, UK Nat Gas -7.7%; Crypto: BTC -1.3%, ETH -2.6%.

- Japan Aug Tokyo CPI Y/Y: 2.9% v 2.7%e; CPI (ex-fresh food) Y/Y: 2.6% v 2.5%e (Highest core rate since Oct 2014).

- RBNZ Gov Orr reiterated stance that would be at least another couple of rate hikes; core view was country would not experience a technical recession [OCR currently stands at 3.00%].

- Ukraine President Zelenskiy stated that country avoided a nuclear disaster after the power link was disrupted by nearby fires; the regular power line to the Zaporizhzhia nuclear power plant was working again.

- ECB said to consider beginning talks on ending APP reinvestments next month but decision is not urgent and is unlikely to be made in Sept.

- Liz Truss said to be considering plans to trigger Article 16 over Northern Ireland protocol within days if she becomes the next prime minister in Sept.

Indices [Stoxx600 -0.05% at 433.16, FTSE +0.16% at 7,491.40, DAX -0.01% at 13,270.22, CAC-40 +0.11% at 6,388.70, IBEX-35 +0.02% at 8,188.91, FTSE MIB -0.24% at 22,400.00, SMI -0.07% at 11,055.70, S&P 500 Futures -0.27%].

Market Focal Points/Key Themes: European indices open higher across the board but later slipped to trade generally mixed; sectors among those leading to the upside are health care and technology; lagging sectors include consumer discretionary and financials; reportedly Russian authorities could freeze Siemens transaction with Inter Rao; reportedly Mercedes Benz preparing to sell its assembly plant in Moscow; Micro Focus to be acquired by OpenText; focus on upcoming speech by Fed Chair Powell at Jackson Hole Symposium; no major earnings expected during the upcoming US session.

- Consumer discretionary: SAS [SAS.SE] +1% (earnings).

- Energy: National Grid [NG.UK} -0.5% (UK Ofgem raised the energy price cap from £1,971 to £3,549, effective Oct 1st for three months).

- Healthcare: GSK [GSK.UK] +1.5%, Sanofi [SAN.FR] +2.5% (Zantac ruling).

- Industrials: Mercedez-Benz [MBG.DE] +0.5% (said to sell Moscow plant), Volkswagen [VOW3.DE] +1% (Audi to enter Formula 1), AF Gruppen [AFG.SE] +3.5% (earnings).

- Technology: Micro Focus International [MCRO.UK] +92.5% (to be acquired).

- UK energy regulator OFGEM raised the energy price cap from £1,971 to £3,549, effective Oct 1st for 3 months.

- Czech Central Bank Gov Michl noted that its monetary policy is already in restrictive territory; Reiterates next Czech rate decision about stability or hike.

- China Planning Agency NDRC reiterated stance that 2022 CPI target of ~3.0% was achievable and saw inflation rising until Q1 (**Reminder: China July CPI YoY reading of 2.7% matched the highest annual since July 2020).

- India govt said to likely curb some rice exports citing risks to global supply.

- USD held onto the bulk of recent gains ahead of Fed Chair Powel’s speech at the Jackson Hole symposium. Dealers noted that Powell's widely-anticipated speech likely to offer clues on the Fed’s tightening plans.

- GBP/USD drifted lower after energy regulator Ofgem confirmed a 80% rise in energy price cap. Dealers noted that the tariff price cap for consumer electricity and natural gas would likely increase the UK inflation rate to 13.3% in October.

- EUR/USD holding below the parity level. Various EU confidence reading in the session highlighted the sharp deterioration seen in the readings over the course of 2022.

- As the summer draws to a close markets will watch the 10-year Italian BTP-German Bund yield spread. Concerns arise that the spread could widen to 260-300 basis points by year-end due to political uncertainties stemming from the Sept 25th snap election.

- (DE) Germany Sept GFK Consumer Confidence: —36.5 v 32.0e (9th straight negative reading and record low).

- (SE) Sweden July Unemployment Rate: 6.4% v 8.6% prior; Unemployment Rate (seasonally adj): 7.0% v 7.6%e; Trend Unemployment Rate: 7.4% v 7.4% prior.

- (SE) Sweden July PPI M/M: -1.5% v +2.5% prior; Y/Y: 20.4% v 25.6% prior.

- (NO) Norway July Retail Sales M/M: -2.1% v -1.0%e.

- (DK) Denmark July Retail Sales M/M: 0.0% v -1.7% prior; Y/Y: -9.1% v -8.6% prior.

- (FR) France Aug Consumer Confidence: 82 v 79e.

- (ES) Spain Jun Total Mortgage Lending Y/Y: 20.1% v 26.1% prior; Mortgage Approvals Y/Y: 12.0% v 24.7% prior.

- (CN) Weekly Shanghai copper inventories (SHFE): 34.9K v 31.2K tons prior.

- (EU) Euro Zone July M3 Money Supply Y/Y: 5.5% v 5.5%e.

- (IT) Italy Aug Consumer Confidence: 98.3 v 92.5e; Manufacturing Confidence Index: 104.3 v 104.2e; Economic Sentiment: 109.4 v 110.7 prior.

- (RU) Russia Narrow Money Supply w/e Aug 19th (RUB): No est v 14.43T prior.

- (TW) Taiwan July Leading Monitoring Indicator: 24e v 27 prior.

- (IN) India sold total INR280B vs. INR320B indicated in 2027, 2028, 2036 and 2051 bonds.

- (IT) Italy Debt Agency (Tesoro) sold €6.0B vs. €6.0B indicated in 6-month bills; Avg Yield: 0.182% v 0.628% prior; Bid-to-cover: 1.46x v 1.47x prior.

- (NG) Nigeria Q2 GDP Y/Y: 2.9%e v 3.1% prior.

- (CO) Colombia Central Bank Board Meeting.

- (US) Kansas City Fed hosts annual Jackson Hole Forum.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2033, 2038 and 2046 Bonds.

- 06:00 (UK) DMO to sell £3.5B in 1-month, 3-month and 6-month bills (£1.0B, £1.5B and £1.0B respectively).

- 07:00 (BR) Brazil Aug FGV Construction Costs M/M: 0.5%e v 1.2% prior.

- 07:00 (MX) Mexico July Trade Balance: -$5.0Be v -$4.0B prior.

- 07:00 (IN) India announces upcoming bill issuance (held on Wed).

- 07:00 (IS) Iceland to sell 2024 and 2042 RIKB Bonds.

- Sells ISK in Apr 2024 RIKB bond; Avg Yield: % v 6.180% prior, Bid-to-cover: x v 1.06x prior.

- Sells ISK in Feb 2042 RIKB bond; Avg Yield: % v 5.230% prior, Bid-to-cover: x v 1.09x prior.

- 07:30 (IN) India Weekly Forex Reserve w/e Aug 19th: No est v $570.7B prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (ES) Spain Debt Agency (Tesoro) announcements on upcoming issuance.

- 08:30 (US) July Personal Income: 0.6%e v 0.6% prior; Personal Spending: 0.5%e v 1.1% prior; Real Personal Spending (PCE): 0.4%e v 0.1% prior.

- 08:30 (US) July PCE Deflator M/M: 0.0%e v 1.0% prior; Y/Y: 6.4%e v 6.8% prior.

- 08:30 (US) July PCE Core Deflator M/M: 0.2%e v 0.6% prior; Y/Y: 4.7%e v 4.8% prior.

- 08:30 (US) July Advance Goods Trade Balance: -$98.5Be v -$98.6B prior (revised from -$98.2B prior).

- 08:30 (US) July Preliminary Wholesale Inventories M/M: 1.3%e v 1.8% prior; Retail Inventories M/M: 1.3%e v 2.0% prior.

- 08:30 (BR) Brazil July Current Account Balance: -$1.9Be v -$2.8B prior ; Foreign Direct Investment (FDI): $3.5Be v $7.6B prior.

- 10:00 (US) Aug Final University of Michigan Confidence: 55.4e v 55.1 prelim.

- 10:00 (US) Fed Chair Powell at Jackson Hole.

- 11:00 (EU) Potential sovereign ratings after European close.

- 13:00 (US) Weekly Baker Hughes Rig Count.

- 21:30 (CN) China July Industrial Profits Y/Y: No est v 0.8% prior; YTD Industrial Profits Y/Y: No est v 1.0% prior.

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EUR/USD has erased a big portion of its daily gains and retreated below 1.0000 after FOMC Chairman Jerome Powell's speech at the Jackson Hole Symposium. Powell reiterated that the Fed will watch the data before deciding on the size of the September rate hike.

GBP/USD has reversed its direction after having advanced to a daily high of 1.1900 during the American session on Friday. The pair fell sharply during Powell's presser as Fed's chief unwound risk-aversion. The Fed won't hesitate on rate hikes, despite whatever harm that means to economic growth. 

Gold has turned south after having advanced beyond $1,750 during the American trading hours on Friday. The benchmark 10-year US Treasury bond yield is up 1% on the day following Powell's speech at the Jackson Hole Symposium, forcing XAU/USD to stay on the backfoot.

XRP price reveals a triple tap setup formation that forecasts a 60% ascent to $0.561. This bullish idea could face headwinds at the $0.397 and $0.464 hurdles. A daily candlestick close below $0.286 will invalidate the bullish outlook for Ripple.

Equity markets will finally get some clarity on the next move in interest rates when Powell takes to the pulpit on Friday. Recent commentary from fellow board members has turned hawkish, but this did not dent equity enthusiasm on Thursday.

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