From Marc to Market:
Overview: The US is consolidating with a softer profile against most G10 and emerging market currencies today, ahead of Fed Chair Powell's speech at Jackson Hole (10 AM ET). He is unlikely to go much beyond confirming what the market already thinks it knows: namely, that the first rate cut will be delivered next month. By acknowledging that the economy has evolved broadly along the lines the central bank expected, it would be a gently push against speculation of a 50 bp move. In the current context, a rate cut will not usher in easy policy, but simply make the current stance less restrictive. The Dollar Index fell to the low for the year in the middle of the week and remains in the trough. The BOJ's Ueda explained last month's rate hike and did not back off the forward guidance for additional rate hikes barring a new shock. The dollar remains within yesterday's range against the yen.
Global stocks did not take fright from yesterday's sharp equity sell-off in the US. Most large markets in the Asia Pacific region rose but Australia, Hong Kong, and South Korea. The Stoxx 600 is up for the third consecutive session. It is the third weekly advance, the longest since March. US index futures are trading higher but look vulnerable technically. Benchmark 10-year yields are narrowly mixed today, and the 10-year Treasury yield is flat near 3.85%. Gold is consolidating in yesterday's range and remains near $2500. October WTI snapped a four-day down draft yesterday, rising 1.5% and is up another 1% to almost $74, partly in response to the attack in the Red Sea....
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