A relatively slow session so far in the middle of the week, with the focus very much still on the Fed and interest rates ahead of the Jackson Hole Symposium that kicks off tomorrow.
It’s interesting that the fear of what could be said is seemingly having a far greater impact on sentiment and the markets than what has actually been communicated in recent weeks. Investors have repeatedly turned a blind eye to Fed commentary since the last meeting which has enabled stock markets to recover a lot of lost ground.
It’s always hard to say how long that will last and whether it will continue as markets have spent much of the last year not on the same page as the Fed and as it’s turned out, for good reason. Any trepidation now may simply be a case of groundwork being laid for another rally later if Powell is deemed to be remotely dovish on Friday, intentionally or otherwise.
The fact remains that Jackson Hole has on occasion in the past been used as a platform to send clear messages to the markets and not always one that is expected. That may be feeding some of the nervousness but if Powell is going to stick to the script and get through to the markets, he’ll need to do so far more convincingly than he and his colleagues have managed so far.
Vulnerable with an eye on Jackson Hole
Bitcoin remains quite stable after last Friday’s shock plunge. As is the case across financial markets, it seems traders have their sights set on Jackson Hole later this week to dictate the next moves. It continues to look vulnerable to a break of $20,000 which could be a painful blow but if Powell says anything that excites the risk-on crowd, we could see it quickly eat away at last week’s loss.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 
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