From Marc to Market:
Overview: The US markets responded dramatically to Federal Reserve Chair Powell's speech at Jackson Hole before the weekend. In today's late August session devoid of much news, the markets are consolidating. The dollar is in narrow ranges, and there may be some more corrective upticks in North America today. Emerging market currencies are more mixed. The PBOC set the dollar's fix lower by a relatively large amount (~0.23%) to a new low for the year and index of Chinese property developers rose as much as 3% earlier today amid expectations of new measures to support the real estate sector.
The Fed funds futures market is discounting now only the high probability of a Fed cut next month but also another one before the end of the year and at least three cuts next year. Moreover, the early forecasts for the next US jobs report (September 5) project another weak report and another rise in the unemployment rate. With London closed, the cash Treasury market awaits the US open, but the futures market points to slightly firmer yields. Most European benchmark 10-year yields are 2-3 bp higher. All the large equity market in the Asia Pacific region report, led by 2% gains in China's CSI 300 and Taiwan's Taiex. South Korea's Kospi and Hong Kong's Hang Seng rallied more than 1%. Europe's Stoxx 600 and US index futures are nursing small losses. Gold rallied almost 1% before the weekend, to almost $3379, but is softer near $3367 in Europe. October WTI has crept up to extend its advance for the fourth consecutive session. It is near $64 after putting in a low last week, near $61.50.
USD: The Dollar Index posted a bearish outside down day ahead of the weekend, in reaction to Fed Chair Powell's comments. It made a new low for the month slightly below 97.60 and settled below the up trendline drawn off the July and earlier August lows....
....MUCH MORE
