Market movers today

Today, markets will continue to focus on the Jackson Hole conference in the US and especially Powell's speech at 16:00. The FOMC minutes from Wednesday showed a highly divided Fed on the question of rate cuts.

Remember this was before the even weaker global macro data, inversion of the yield curve (albeit only briefly) and even lower inflation expectations. Hence, we look for any statements on the latest developments and/or discrepancies among the FOMC board. ECB GC members Lane and Coeuré are also participating in the conference.

 

Selected market news

We have seen some modest gains in the Asian equity markets while the global financial markets are awaiting the speech by Fed Chairman Powell this afternoon. Comments from various Fed officials are pointing in different directions, as some members do not need see the need for another rate cut, while others see scope for a rate cut in September.

In Italy, the president is giving the parties until Tuesday to find a new government. Not surprisingly, League leader and interior minister Salvini is looking for a snap election, while the 5SM party is exploring the possibility of a coalition with the PD's Renzi. So far, the market is looking for a positive outcome as spreads are tightening.

The Japanese inflation data released this morning did not give much support for the Bank of Japan as CPI for July came in at 0.5% y/y versus 0.6% in June, while CPI excluding fresh food was 0.6% y/y, unchanged from June. Hence, inflation remains low and this will support expectations that the BoJ will ramp up monetary policy stimulus in September.

Last night, we published an update on the global economy ( Global Economic Update: Stuck in the mud but no hard landing yet) . The global macroeconomic backdrop has weakened significantly since we published our last Big Picture in June, following the escalation of the trade war between China and the US, where we now don't expect a resolution on this side of the US presidential elections. We see further downside for the global economy in the coming months, followed by a stabilisation and modest rebound on the back of monetary and fiscal stimulus and we have downgraded our growth trajectory for both advanced and several emerging markets with the risk of a more pronounced slowdown having increased, but there is also positive risk, including a sudden resolution of the trade war.

Download The Full Daily FX Market Commentary

This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD rebounds after dismal US PMIs

EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates. 

EUR/USD News

GBP/USD advances to 1.2950 after US data

GBP/USD is trading around 1.2950, taking advantage of US weakness stemming from a downfall in Markit's Services PMI in the US. In Britain, the Manufacturing PMI exceeded estimates. 

GBP/USD News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Consolidation process underway

The Crypto board continues to be immersed in an emotional leg-breaking, consistently punishing the emotional state of the traders with its continuous changes of direction.

Read more

XAU/USD unstoppable, breaks to fresh 2020 highs, approaching $1650/oz

XAU/USD is trading in an uptrend above its main daily simple moving averages (SMAs) while breaking above a bull channel. Gold is printing fresh 2020 highs hitting $1646.64 per ounce on an intraday basis.  

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures