This week saw a strong US retail sales print and the FOMC minutes warned of inflation risks lingering for the US. The RBNZ warned of inflation concerns too and how interest rates may need to stay higher for longer. The UK also saw inflation problems with headline inflation at 6.8% y/y for July. This has bumped up the chances of the BoE needing to hike again in September. It’s typically quieter in markets around the summer months and markets will likely look to Jackson Hole next week for more recent cues on the path of Fed rates for 2024.

Other key events from the past week

• USD: US retail sales beat, Aug 15: The US retail sales print beat market expectations with a print of 3.2% y/y for July. This shows a resilient US economy, but can this continue as pandemic savings levels continue to dwindle?
• NZD: Higher rates for longer, Aug 16: The RBNZ kept rates unchanged as expected, but it did revise higher its rate projections and now no longer projects a rate cut for December next year. More AUDNZD falls ahead?
• GBP: The inflation nation, Aug 16: Inflation remains sticky in the UK with the core staying elevated at 6.9% y/y for July which is the same as the prior print for June. Interest rate markets now see a 92% chance of the BoE hiking on Sep 21.

Key events for the coming week

• EUR: PMI prints, Aug 23: Short-term interest rates are split roughly 50/50 on whether or not the ECB will hike by 25 bps on its next meeting on September 14. A weak PMI print next week will increase the chances of the ECB holding rates.
• Seasonal Insights: Will silver’s downtrend continue into September?
• USD: Jackson Hole symposium, Aug 26: The Jackson Hole symposium begins next week and investors will be looking for clear signs of how long the Fed will be keeping rates at current levels. If markets see higher rates for longer then the recent sell-off in bonds could continue which would likely pressure gold further.

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