Markets steady following cautious Fed message

Financial markets are steady from Friday’s strong close following Fed Chair Jerome Powell’s highly-anticipated delivery at the Jackson Hole symposium. In a first step towards reducing its $120B monthly asset purchase program, Powell said the Fed would scale back its bond buying later this year, but emphasized it was in no hurry to raise short-term rates. US stocks opened higher this morning, in-line with higher Asian and European stocks. Global bond prices and the US dollar are little changed. There is a full slate of economic data to be released this week, the highlight will be Friday’s jobs data for August.

Economic Data this Week:

Monday: US Pending Home Sales (July), Eurozone Consumer Confidence (August), Japan Jobless Rate (July)

Tuesday: US Consumer Confidence Index (Aug), Eurozone CPI (August), Canada GDP (Q2)

Wednesday: US Manufacturing Purchasing Manager’s Index (August), UK PMI Manufacturing (August), Eurozone Unemployment (July)

Thursday: Eurozone PPI (July), Japan PMI Services/Composite (August)

Friday: US Services Purchasing Manager’s Index (August), US Jobs Report (August), UK PMI Services (August), Eurozone Retail Sales (July)

FX Rates
August 30, 2021

Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.

EUR/USD 1.1792
GBP/USD 1.3744
USD/CAD 1.2600
AUD/USD 0.7295
USD/JPY 109.95
USD/CNH 3.4683
USD/ILS 3.2172
USD/MXN 20.1801
USD/CHF 0.9168
USD/INR 73.2738
USD/BRL 5.2122
USD/SGD 1.3451
USD/DKK 6.3058
USD/SEK 8.6369
USD/NOK 8.6574
USD
The dollar is little changed over the weekend after Friday’s biggest fall since May. Traders are in a risk-on mood following Fed’s Powell uplifting speech on Friday. The market focus will now be on the multiple economic data releases this week, the highlight to be Friday’s US jobs data for August.
GBP
The UK pound changed little from Friday and remains near the upper end of a relatively narrow $1.37-1.38 range in place for most of last week. A rise in Covid-19 cases continues to be a headwind for further GBP strength. The week is full of economic releases for the UK, with Purchasing Manager’s data for both Services and Manufacturing being the highlights.

EUR
The euro is virtually unchanged from Friday, when it jumped to over $1.18 following Fed Powell’s speech which reassured investors and led to a risk-on mood and demand for assets/currencies. Traders await a full docket of economic releases this week for the eurozone.
CAD
The Canadian dollar outperformed most of its G-10 peers. Markets were surprised by the widening of Canada’s current account surplus from $1.2B in Q1 to $3.5B in Q2 – expectations were for a surplus of only $0.5B. Analysts attribute the improvement to higher prices of exports – primarily forestry products, building materials, and energy products.
ASIA/PACIFIC
The Chinese yuan moved little, as traders await PMI data for August to be released this week.

Both the NZD and AUD fell on the back of soaring Covid cases in their respective countries.

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Source: Bloomberg

This article is intended for U.S. audiences only.

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WRITTEN BY

Scott Petruska

Markets steady following cautious Fed message