Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Marketmind: Cautious undertone, waiting for Jackson Hole

Published 08/25/2022, 01:15 AM
Updated 08/25/2022, 01:45 AM
© Reuters. FILE PHOTO: A trader works at the stock exchange in Frankfurt, Germany, February March 9, 2020. REUTERS/Kai Pfaffenbach

© Reuters. FILE PHOTO: A trader works at the stock exchange in Frankfurt, Germany, February March 9, 2020. REUTERS/Kai Pfaffenbach

(Corrects typographical error in headline.)

A look at the day ahead in European and global markets from Anshuman Daga.

While Asian stocks managed to make modest gains on Thursday, there is a heavy air of caution among investors ahead of what may prove a pivotal central bank gathering.

Markets are bracing for the U.S. central bank to double down on its commitment to crushing inflation as Federal Reserve Chair Jerome Powell is set to give a speech at its annual summit in Jackson Hole, Wyoming.

Europe is even messier.

The euro zone faces the double whammy of deteriorating growth expectations, while the risk of inflation rising further is increasing.

Market attention is on the minutes due on Thursday from the European Central Bank's last policy meeting that are likely to sound hawkish.

The ECB hiked interest rates by a bigger than expected 50 basis points last month to zero percent and economists expect no letup by the central bank as it seeks to stamp out runaway inflation.

Gross domestic product data in Germany - expected to show zero growth in the June quarter - along with the IFO business climate index will give further clues on the state of affairs of Europe's largest economy.

Meanwhile, analysts are turning bearish on equity markets, after a brief respite seen in the last two months.

Fears of energy shortages, anaemic growth and soaring inflation are likely to stall European shares, a Reuters poll found.

The euro,, which is flirting with a 20-year low of $0.99005, has been battered by growth concerns, with an energy crisis adding to the gloomy outlook.

German and British bond yields have surged recently as investors fret about sky rocketing inflation that shows little signs of easing.

In Asia, rate hikes remained the big worry.

South Korea's central bank became the latest to raise its key interest rate by 25 basis points and signalled the need for further hikes to curb inflation perched at near 24-year highs.

Graphic: Costlier by the month - https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/jnvwendkkvw/chart.png

Key developments that could influence markets on Thursday:

Economic data: German Q2 GDP, German IFO business climate index, French business climate

ECB publishes account of July policy meeting

© Reuters. FILE PHOTO: Federal Reserve Board Chair Jerome Powell speaks during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., July 27, 2022. REUTERS/Elizabeth Frantz

Jackson Hole symposium kicks off (ends August 27)

(The story refiles to correct a typographical error in headline.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.