Financial Markets Daily Report23 August 2021
In August's low trading environment, markets searched for direction as investors continued to weigh the spread of the Delta variant against positive economic indicators and some hawkish-sounding remarks from Fed officials.
- In August's low trading environment, markets searched for direction as investors continued to weigh the spread of the Delta variant against positive economic indicators and some hawkish-sounding remarks from Fed officials.
- A positive earnings season led to moderate gains in advanced-economy stocks since the end of July. In contrast, EM equities suffered from China's tech crackdown, declining commodity prices and Fed taper talk.
- In fixed-income markets, euro area sovereign yields dropped as markets adjusted to the ECB's July dovish forward guidance. In the U.S., yields remained around July's lows even as solid inflation and activity data led several Fed officials to signal that a tapering announcement could be on the table in September. The USD rose moderately.
- This week the focus will be on the release of August early activity indicators (i.e. flash euro area and U.S. PMIs on Monday 23) as well as on U.S. July PCE inflation and the Fed's Jackson Hole Symposium (both on Friday 27).