The bulk of relevant economic data today will come from Europe. The EU released its latest consumer confidence, industrial sentiment and economic sentiment reports for August, which were a bit of a mixed bag. Consumer confidence met the forecast at -5.3, economic sentiment missed the goal narrowly, while industrial sentiment was better than expected at 13.7.
A bit later today Germany will publish its inflation rate monthly and yearly preliminary estimates for August.
Furthermore, today the markets will continue digesting the results from the Jackson Hole Symposium, in particular Chairman Jerome Powell’s dovish statements. Powell confirmed that the Fed might begin tapering its asset purchases before the year’s end but did not specify when exactly. Moreover, he stressed that this wouldn’t mean the timeline for interest rate hikes is moving up.
As a result, the dollar weakened at the end of last week and remains marginally lower today. This trend may hold for a few more days.
US stock indices, which tend to react well to dovishness, will extend their gains today, as will other risk-friendly assets. Risk sentiment in general will be higher, thanks to the promise of prolonged dovishness by the Fed on Friday.
The same cannot be said for Chinese stocks, however. The government shocked the markets with yet another set of restrictions, this time to its vibrant gaming sector. According to the latest information, minors in China will only be allowed access to online games on weekends, holidays, and for one hour on Fridays, cutting down their playtime considerably.
Also of interest today will be airlines, especially European ones, because the EU announced it will once again impose a ban on non-essential travel from the United States in order to limit the bloc’s exposure to the delta variant, which is currently rampant in the US.
In terms of the crude oil market, prices are going down today after the damage of Hurricane Ida turned out to be less serious than expected earlier (though it is still considerable). The WTI brand fell to $68.39, while the Brent crude reached $71.65 per barrel.
