Rates markets have fully priced a 25 basis point U.S. interest rate cut for September and a near 1/3 chance of a 50 bp cut, driving the dollar down steadily on just about everything.
Gold has notched records above $2,500 an ounce this week and the euro is in unfamiliar territory at $1.11.
Some analysts see risks if the labour market seems stronger than expected, or if Fed Chair Jerome Powell doesn’t sound very dovish in a speech he is due to give at Jackson Hole on Friday.
CNN’s fear and greed index, derived from conditions in stock, options and credit markets, has recovered to neutral from “extreme fear” just a week ago. But investors seem to want new data to validate the benign outlook before plunging in again.
Data in Asia on Wednesday showed Japanese exports lagging expectations, while South Korean exports for the first 20 days of August went up 18.5% from a year earlier.
