Mohicans markets：Focus on the Impact of Jackson Hole's Annual Meeting of the Central Bank

☆22:30 US August Dallas Fed business activity index announced. The U.S. Dallas Fed Business Activity Index recorded -22.6 in July, the lowest level since May 2020.

☆The next day at 02:15, Fed Vice Chairman Brainard delivered a speech. Investors should pay attention to whether Brainard will follow the collective “hawking” of several dovish Fed officials.

☆UK - London Stock Exchange is closed for one day.

Global Views - List of Major Markets

On Friday August 26, spot gold rose to a high of $1,765.36 before the U.S. market, after being blocked and falling back to $1,760, it finally closed up 0.45% at $1,758.94 per ounce.Spot silver closed up 0.72% at $19.25 an ounce.

The US dollar index fell first and then rose. It fell below the 108 mark during the session, and then recovered most of the lost ground, and finally closed down 0.18% at 108.41. The 10-year U.S. Treasury yield fell sharply, but remained at a high level, closing at 3.031%.

In terms of crude oil, the two crude oils fell sharply during the U.S. session. WTI crude oil rose to a high of $95.72 and then dived sharply, and once fell more than 3%, and finally closed down 2.43% at $93.00 per barrel. Brent crude oil fell below the $100 mark and finally closed down 1.88% at $99.78 a barrel.

The Dow closed up 0.98%, the Nasdaq closed up 1.67%, the S&P 500 closed up 1.41%, the Nasdaq China Golden Dragon Index rose more than 6%, and the U.S. stock market closed sharply higher on Thursday. Investors focused on the Federal Reserve's Jackson Hole meeting for clues on the Fed's policy outlook, boosted by gains in Nvidia and other tech-related stocks.Investors will dissect Fed Chairman Jerome Powell's speech on Friday for signs of how aggressive the central bank may be in raising interest rates as it battles multi-decade-high inflation.

Most European stocks closed up, with the German DAX index closing up 0.39% at 13271.96 points. Britain's FTSE 100 closed up 0.11% at 7479.74 points. The Stoxx Europe 50 closed up 0.19% at 3,674.54 points.

Precious Metals

Gold fell more than 1% on Friday August 26, Beijing time, after Federal Reserve Chairman Jerome Powell said in a speech at Jackson Hole that the U.S. economy needs tighter monetary policy until inflation is under control. Powell said that could mean slower growth, but gave no hint of what the Fed might do at its September policy meeting. 

This week will usher in the US non-farm payrolls report for August. In view of the recent data showing that the US job market is still very strong, it may further provide support for the Fed to raise interest rates by 75 basis points in September, which is biased towards the bearish gold price. In addition, the US August ISM manufacturing and non-manufacturing PMI data will be released this week. These two indicators are forward-looking indicators, which can provide a better judgment for the US economic outlook and investors need to pay attention.

In addition, the US ADP data will be released after a lapse of two months, investors also need to pay attention.

Fundamentals are mainly bullish

[U.S. consumer spending barely grew in July. Monthly inflation suddenly stopped reducing the need for 75 basis points of interest rate hikes]

[The three major U.S. stock indexes all fell more than 3%]

[Germany will continue to provide financial and military support to Ukraine]

[Ukraine's Zaporozhye nuclear power plant and nearby towns were shelled, increasing nuclear disaster fears]

Fundamentals are mainly bearish

[Powell bluntly says the Fed will not reverse its stance until inflation is under control]

[Federal Reserve Bostic said that interest rates should be increased by 100-125 basis points, and then remain unchanged for a long time]

[The dollar is again approaching a more than 20-year high after Powell adopts a hawkish tone to fight inflation]

[ECB policymakers advocate another sharp rate hike in September]

[USD net long bets increased to $13.79 billion in the last week]

[IMF Gopinath: All major central banks need to act decisively to fight inflation]

On the whole, at present, the Federal Reserve and the European Central Bank are likely to further raise interest rates significantly in the short term, and most other central banks in the world also tend to follow the pace of the Federal Reserve, which will increase the opportunity cost of holding gold, and in the short, medium and long-term, they are all biased against the price of gold.

Crude Oil

In early trading on Friday August 26, Beijing time, oil prices eventually closed higher, helped by signals from Saudi Arabia that the Organization of the Petroleum Exporting Countries may cut production. But trading was volatile and investors understood and ultimately regarded Fed Chairman Powell's warning of economic pain ahead as unimportant.  

Negative factors affecting oil prices

[The U.S. Rejects All Iranian Conditions in Final Iran Nuclear Deal Response]

[Shelling of Ukraines Zaporozhye Nuclear Power Plant and Nearby Towns Adds to Fears of Nuclear Disaster]

[Germany to Continue Financial and Military Support to Ukraine]

Positive factors affecting oil prices

[Powell Bluntly Says Rate Hikes Will Be Painful But the Fed Wont Reverse Course Until Inflation Is Under Control]

[The U.S. Stocks Suffer From Powells Hawkish Comments]

On balance, the Federal Reserve Chairman Powells hawkish speech at the annual meeting of global central banks limited oil price gains. But the final text of the Iran nuclear agreement in reply, the two sides did not negotiate smoothly, making Iranian crude oil back to the market or another setback. Coupled with the West continues to increase support for Ukraine, geopolitical tensions show no signs of slowing down, oil prices or maintain the tone of shock rise.

Foreign Exchange

In the early trading session on Monday, August 29, Beijing time, the dollar index was trading around 108.85.The index rose on Friday. Previously, the Fed Chairman Jerome Powell took a hawkish tone of fighting inflation, but did not settle the debate about how much interest rates might be raised at the meeting in September. He made clear that continued tightening is the path he will take.

Data to watch: at 07:30, August 30, Japan's unemployment rate in July, expected value 2.6%, previous value 2.6%.

Important events to watch: the ECB chief economist Lien gives a speech on Monday, August 29. The Fed Vice Chairman Brainard speaks at FedNow seminar on Tuesday, August 30. The EU foreign ministers meeting was held untill August 31.

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