Fed Chair Jerome Powell will be back in the spotlight when he takes the podium at Jackson Hole later in the day to deliver a speech investors have been waiting for all week.
Any hints about the Fed’s rate outlook are sure to reverberate across asset classes.
Stock markets around the globe slid as nerves grew, with Wall Street taking a tumble overnight and Japan’s Nikkei dropping 2% in the Asian morning.
People walk down a street lined with outdoor seating for restaurants in the Little Italy neighborhood of Manhattan, in New York City, New York, U.S., July 18, 2021. REUTERS/Jeenah Moon
Confidence shaken
Stoxx 50 futures didn’t offer much hope for the coming day after Europe’s benchmark drooped on Thursday.
The pristine U.S. resiliency story took a hit earlier this week after surveys showing dismal business activityshook confidence. Apparel retailer Gap on Thursday joined a pack of corporations that have forecast steeper-than-expected declines in revenue, against a backdrop of weakening demand for discretionary items.
Graphics are produced by Reuters.
Waiting for Powell
Meanwhile, weekly figures on unemployment insurance out the same day served as a reminder that the U.S. labour market remains tight, providing no relief for the Fed.
Fed officials squeezed in some final public comments before the boss’s speech: Philadelphia Fed President Patrick Harker leaned towards holding policy steady for the rest of the year, while Boston Fed President Susan Collins kept the door open for additional hikes.
Whether or not those comments are any sort of a preview of what’s to come from Powell’s speech, investors will just have to wait to find out.
Key developments that could influence markets on Friday:
Jackson Hole: Speeches by Fed Chair Jerome Powell and ECB President Christine Lagarde
Germany Q2 GDP detailed, August business surveys
Sweden July PPI, unemployment rate, payrolls
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