Week Ahead – Will we have action in Jackson?



The upcoming week is all about the Federal Reserve’s symposium in Jackson Hole, Wyoming.  A couple months ago, this gathering was eyed as a potential time for the Fed to formally announce its plan on tapering asset purchases, but now it will determine if Fed Chair Powell is ready to join the tapering crowd at the Fed or slow them down.  Growth concerns and delta variant jitters now have this symposium as a stop gap until the September FOMC policy meeting.  At best, investors expect Fed Chair Powell to give clues on how close the economy is to delivering substantial progress with the labor market recovery and if he can signal a formal taper announcement is coming at the next policy meeting.  Powell may choose to wait to see more data before firmly signaling the Fed is ready to begin tapering the $120 billion-a-month government bond buying program.


On Monday, many traders will pay close attention to the flash PMI readings that should show both the manufacturing and service industries are easing slightly.  Shortly after the NY open, the release of existing home sales should confirm the housing market is cooling.  Thursday contains the second reading of second quarter GDP and Core PCE, along with weekly initial jobless claims.  Friday’s release of US personal income and spending data will provide valuable insight over how strong the consumer is and if their buying habits are shifting towards services.  The Fed’s preferred inflation gauge may also show price gains continued in July.



The ECB minutes next week will be more interesting than normal, coming after the central bank tweaked its mandate to target 2% inflation while allowing for a temporary overshoot. Divisions in the central bank are clear and possibly more fierce than ever. But the overwhelming majority support the ECBs new stance which should ensure the tapering discussion remains some way off.

Euro area PMIs along with German GDP, and Gfk and Ifo surveys, are among the notable releases next week. We’ve already seen confidence wane as a result of the delta variant and that may be evident in the data to come.


The data coming from the UK has been pretty good recently, while inflation dipped last month as favorable base effects came into play. It will rise again in the coming months, likely well beyond the BoE target, but policy makers remain convinced it’s transitory and does not warrant any immediate tightening.

PMIs on Monday are the only notable releases next week. Recent surveys from various countries are highlighting concern among businesses and consumers around the near-term outlook due to the delta surge.

Emerging Markets


The economy grew 10.3% in the last quarter, taking it above its pre-pandemic level. Growth is expected to slow considerably from Q2 levels, which compared favourably as a result of the April and May lockdowns last year, which hasn’t been repeated despite high fatality rates and low vaccine rates.

The central bank recently raised rates to 6.5% and warned that more may follow. Industrial output on Wednesday is the only notable release.

South Africa

Inflation fell to 4.6% in July, very close to the 4.5% midpoint of the SARBs target range which will allow the central bank to be patient with rate hikes. The next move will still be up and likely before the end of the year but expectations are being pared back thanks to the lower growth expectations.

Unemployment and PPI inflation data due next week which may further take the pressure off the central bank.


Governor Şahap Kavcıoğlu remains stuck between a rock and a hard place. Does he risk higher inflation or the sack, the fate suffered by numerous predecessors that didn’t share the unconventional view on the link between interest rates and inflation of President Erdogan. The Governor has not been forced to raise interest rates yet and test Erdogan’s trigger happy nature but with inflation marginally below the 19% interest rate, there isn’t much wiggle room. Thankfully, inflation is expected to fall between now and year-end so the pressure to hike will be replaced by the pressure to cut. How he balances those will determine whether he’s still in a job come the turn of the year and how the lira will fare in the interim.

Tier two and three economic data this week with attention on the inflation data in two weeks and the next CBRT meeting a month from now.

Asia Pacific


Government regulatory risk continues to dominate China equity markets, this time with President Xi pushing an agenda of wealth redistribution from rich to poor.  China equities remain under pressure as a result, complicated by market nerves on the tapering of stimulus by the FOMC with China and Asian stocks hammered after the FOMC minutes suggesting a year end start.China equities will remain under pressure going forward as markets rebalance pricing to find the equilibrium between attractive multiples and government risk. We’re not done yet. Hong Kong, home to the listings of China tech heavyweights, remains most exposed..

Covid’s delta-variant cases have reduced, but if they suddenly rise again, China equity markets will suffer.although cases remain low. Ningbo port remains partially shut and escalating cases would have knock-on effects on global risk sentiment. Readers should monitor this situation closely.

China has only one major data point next week, Industrial Profits on Friday 27th. Given the nerves over weaker than expected data recently, a poor number will send China equities sharply lower.


The Indian Rupee is befitting from strong international inflows as overseas investors switch funds from China to opportunities in India’s equity markets. USD/INR remains steady as a result around 74.310. The fall in oil prices could see USD/INR fall in contrast to other USD/Asia pairs as oil importers will have to buy less US Dollars. We see no immediate impact on India equity or bond markets over the Afghanistan situation, although its neighbours bond markets have been heavily sold.

India’s data calendar is quiet this week with no significant data releases.

Australia & New Zealand

The Australian and New Zealand Dollars have been sold heavily as global risk proxies and as each country now deals with its own Covid-19 delta-variant outbreaks. Australian equities are finally starting to feel the domestic heat from the virus as NSW cases spiral and rise alarmingly in Victoria also. It is clear that there will be no exit from restrictions anytime soon, and with the NSW and Victoria remaining so, domestic consumption will surely now take a hit.

New Zealand now has 20+ cases in Auckland, a number surely set to risk and with the entire country in a hard lockdown. The RBNZ postponed its rate hike because of this.The trajectory of the case numbers will dictate NZD’s direction to some extent but both AUD and NZD could fall another 200/300 points this week if the global delta/growth/Fed taper sentiment persists.

Perversely, NZ equities are outperforming as the fall in the Kiwi lifts exporter earnings.

Australia and New Zealand Retail Sales will provide short-term volatility, but really it is all about domestic virus situations and global risk sentiment.


Japan releases Jibun Bank Flash PMIs for August at the start of the week, the only significant data for the week. With market sentiment such that a weaker number could prompt heavy intraday selling of local equities. Meanwhile Japan’s virus cases continue to spiral.The Nikkei 225 has finally rolled over in the face of the Covid-19 wave, fears of Fed tapering and a sharp deterioration in global risk sentiment due to the delta variant. Ominously, the Nikkei 225 is closing at 8 month lows near 27,000.00.A longer-term technical pattern highlighted a bearish triangle breakout from 29,700 in early June. It has a target of 25,700.00 and a close unde 27,000.00 puts this back in play.

USD/JPY has been buffeted between over the past week. The prospect of a Fed tapering is strongly supportive of USD/JPY. Meanwhile, haven inflows into the Yen, and heavy AUD/JPY selling has capped USD/JPY gains. USD/JPY has the potential to move 200+ points plus in either direction in the week ahead, depending on which theme ends up winning the battle.




Global macro weakness has wreaked havoc over the short-term crude demand outlook.  Oil prices have been in freefall as Wall Street turns cautious over delta variant jitters and as Fed taper expectations boost the dollar.  Now that crude prices have hit the lowest levels since May, OPEC+ is getting nervous over their strategy to ramp up output.  Oil producers want to boost supply but want to make sure they avoid taking this market away from its deficit.

The Biden administration pushed for OPEC+ to boost supply, but the cartel of oil producers may not want to continue raising output at the September 1st meeting.  If the theme across Asia is for further restrictive measures, oil prices could remain heavy.

Despite the recent oil price weakness and near collapse to bear market territory, a strong reversal may not be too far away.  Crude fundamentals still support robust demand once most of the world is beyond this latest wave of the delta variant.  COVID cases could be peaking in the US and as vaccination efforts continue to improve globally, reopening momentum should resume after September.



Gold volatility should remain elevated heading into the Jackson Hole symposium.  If Fed Chair Powell tap the brakes on the Fed’s plans over tapering, that could be the catalyst to take prices above the $1800 level.  Gold has been one of the best performing commodities despite a rising dollar, but if Wall Street sees a massive selloff, panic selling may strike bullion down.

As long as Treasury yields remain grounded the gold trade should be alive and well. If gold is able to have a daily close above the $1800 level, bullish momentum could target the $1830 level.  If Powell signals he is ready to head for the exit, gold could slump back towards the $1700 region.


The global crypto market cap value is now back above $2 trillion as Bitcoin continues to see steady inflows.  Bitcoin dominance is waning however as much of the interest in cryptocurrencies is spreading to Ethereum, Cardano, XRP, and Dogecoin.

Bitcoin is having another run at $48,000 at the end of the week. Given the overall risk-off tone on Wall Street, Bitcoin could still face resistance if the broader market is downbeat.

The price of Bitcoin could break above the $50,000 level next week if Fed Chair Powell decides he wants to slow up the Fed’s plans on tapering.  The longer-term outlook for Bitcoin is looking perfectly healthy regardless of whether we see a breakout or a pullback here.

Key Economic Events

Sunday, Aug. 22

-German Chancellor Merkel meets Ukrainian President Zelenskiy in Kyiv

-US Vice President Kamala Harris visits Singapore and Vietnam.

Monday, Aug. 23

-Ukraine tries to put spotlight on Russia’s annexation of Crimea, in a conference with Poland, Lithuania, Latvia, Sweden and others.

Economic Data/Events:

  • US Aug Prelim manufacturing PMI: 63.0e v 63.4 prior; Services PMI: 59.2e v 59.9 prior, Existing Home Sales: 5.84Me v 5.86M prior
  • European flash PMIs (France, Eurozone, Germany)
  • Eurozone consumer confidence
  • UK preliminary PMIs
  • Mexico retail sales
  • Singapore CPI

Tuesday, Aug. 24

Economic Data/Events:

  • US new home sales
  • Germany GDP
  • Mexico bi-weekly CPI
  • South Africa unemployment
  • Hungary central bank rate decision: Expected to raise interest rates 30bps to 1.50%

Wednesday, Aug. 25

Economic Data/Events:

  • US July prelim durable goods: -0.4%e v +0.9% prior
  • Germany Aug IFO business climate: 100.2e v 100.8 prior; Expectations: 100.7e v 101.2 prior
  • Mexico GDP
  • New Zealand trade
  • Russia industrial production, CPI
  • EIA Crude Oil Inventory Report

Thursday, Aug. 26

– The Federal Reserve Bank of Kansas City hosts its annual Jackson Hole Economic Policy Symposium.  Speakers include Fed Chair Jerome Powell and Kansas City Fed President Esther George.

Economic Data/Events:

  • US Q2 GDP(Second reading), initial jobless claims
  • Mexico central bank monetary policy minutes, unemployment rate
  • Eurozone M3 money supply
  • Singapore industrial production

Friday, Aug. 27

– Jackson Hole Speakers: Fed Presidents Raphael Bostic (Atlanta), Patrick Harker (Philadelphia), Robert Kaplan (Dallas), James Bullard (St. Louis) and Loretta Mester (Cleveland)

Economic Data/Events:

  • US July personal income: 0.2%e v 0.1% prior/spending: 0.4%e v 1.0% prior, wholesale inventories, University of Michigan consumer sentiment
  • Sweden Q2 GDP Q/Q: 0.8%e v 0.8% prior, retail sales, Trade balance
  • Mexico Trade Data
  • Australia retail sales
  • China industrial profits
  • Japan Tokyo CPI

Sovereign Rating Updates:

– Poland (Fitch)

– Denmark (S&P)

– EFSF(Moody’s)

– ESM (Moody’s)

– France (Moody’s)

– Portugal (DBRS)

– Sweden (DBRS)


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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.