Daily Market Commentary 29th August 2023

A quiet start to the weeks trade, with little economic data released. Equity markets digested the Fed Chairman’s Jackson Hole address, and came to the conclusion, that it was in line with expectation. Powell warned of future inflationary pressures and a willingness to further raise rates, so it was each way bet. Markets will put this to the test this week, with major inflationary data releases, in both Europe and the US. If inflation does persist at stubbornly high levels, then markets will react, and with bond yields trading at or near highs, this could spell trouble. US equities rallied to open the week, and bonds and currencies remained fairly stable. US employment data will also be in focus, with four major reports out the week, leading off with the Jolts report and culminating in Friday’s Non-Farm Payrolls. The EUR looks to hold onto 1.0800, while the GBP attempts to regain 1.2600.

The commodity currencies remain under pressure, with the AUD struggling to hold 0.6400, while the NZD looks to regain 0.5900. International forces are likely to drive these currencies early in the trading week.