Jerome Powell sent stocks lower last Friday and the falls continued this week in global indices as investors price in higher US interest rates. This week saw a tranche of US data with consumer confidence, ISM manufacturing PMI and NFP ahead on Friday. There are many narratives in markets right now: the pace of Fed hikes, the energy crisis from Russia/Ukraine, an ailing property market in China, slowing UK and EU growth, and surging inflation. If there was ever an uncertain time in markets it is now as the future path for stocks, commodities, and the USD are all uncertain. Be careful on taking medium-term views right now.

Other key events from the past week

  • USD: Consumer Confidence, Aug 30: US consumer confidence came in at 103.20, above maximum expectations of 102.6. Evidence that the US consumer is confident encourages expectations of future Fed hikes which is what lifted the USDJPY up to 139.00 on Tuesday. However, will USDJPY strength last?
  • China 50: PMI beat, Aug 31: Going forward is it still sensible to be bullish on China? The Chinese PMI beats this week were welcomed by China’s 50 index, but will concern over China’s property sector still weigh on sentiment?
  • USD: NFP print, Sep 02: At Jackson Hole Powell mentioned that the NFP was going to be a key print for the Fed in terms of the pace of interest rate. Usually, a beat here in the headline figure would be expected to keep the USDJPY bid and pressurise on stocks. This print on Friday could set Fed expectations.

Key events for the coming week

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