Rise and shine everyone.
Today’s the day everyone’s been waiting for. Chair Powell delivers his Jackson Hole speech at 10 am ET. Markets seem to be tempering expectations of an outsized rate cut in September, i.e., 50bps. Yesterday, we saw yields pullback, the USD index rise and markets give up quite a bit of their gains from the past few days.
To add to the Fed cut debate, the US Flash Manufacturing PMI came in lower than expected at 48 vs. 49.6, and Initial Jobless Claims also came in marginally higher at 232k vs. 228k previously. However, the 4-week average that we like to track still remains lower, because of last week’s lower print.
Asian markets are mostly higher this morning, despite Governor Ueda delivering a hawkish testimony to their Lower Parliament. The JPY strengthened and JGB 10Y yields rose, but markets also rallied. Chinese equities saw a boost after the government said that they would speed up purchases of unsold houses to turn them into affordable housing.