* Subdued trading after Jackson Hole
* STOXX 600 up 0.1%
* Wall Street futures tick up
* UK on bank holiday
Aug 30 - Welcome to the home for real-time coverage of
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THE REFLATION TRADE LIVES ON (0833 GMT)
It seems Powell's Jackson Hole speech extended the appeal of
one of the most popular trade of the year.
According to this morning's UBS House View, the investment
implication of the Fed chair's dovish speech support the
reflation trade.
"The resumption of the reflation trade that was evident all
week continued after the speech", the strategists argued.
"After a hawkish turn during the summer, the speech is more
reminiscent of Fed communication early in the year that
emphasized maximum employment and data dependency", they argued.
"That messaging was supportive of value and cyclical
equities back then, and we think that is the case once again".
Some reading on Jackson Hole:
ANALYSIS-Powell's wait-and-see speech reassures some
investors
Why Fed Chair Powell still thinks high inflation is
'temporary'
Fed's Powell holds fast to 'this year' timeline for
bond-buying taper
(Julien Ponthus)
*****
A SUBDUED OPEN FOR EUROPE (0726 GMT)
Maybe it's due to the bank holiday in London but this early
session in Europe sure feels quiet!
There's currently no stock across the STOXX 600 moving above
2%, which underlines just how little volatility there is at the
moment. To be fair the corporate newsflow is extremely thin and
doesn't warrant much market price action.
The pan-European benchmark is up about 0.1% and all sectors
are trading fairly quietly.
The best performance is in the automotive space, which is up
0.4%. Insurance, with a 0.25% dip, is the worst performer.
All in all though, European stocks are less than 1% away
from their August 13 record high of 476.16 points.
Not much action either for Wall Street futures which are
just very slightly trading in the black.
To be fair, most asset classes seem to be on hold at the
moment, be it in currencies with a perfectly flat dollar index
or bonds with Germany's 10-year Bund yield not moving much
either.
(Julien Ponthus)
*****
JUST A LITTLE BIT LONGER (0638 GMT)
A consensual takeaway from Federal Reserve Chairman Jerome
Powell's remarks at the Jackson Hole Symposium is that investors
will be able to dirty dance to the beat of the Fed's $120
billion monthly asset purchases for just a little bit longer.
Powell stuck to his dovish monetary policy message without
disclosing the timing of the central bank's tapering strategy,
allowing the S&P 500 and the Nasdaq to close at record highs on
Friday.
Like all things, the current bull market must come to an end
some day. But investors who feared that moment could have been
last Friday can sigh in relief even if September is typically
the trickiest month of the year for Wall Street.
There seems to have been no second thoughts or buyer's
remorse over the weekend with Asian bourses on the rise this
morning and the dollar index falling to a two-week low.
Wall Street futures are ticking up and European bourses are
set to open slightly in positive territory. Britain is closed
for a bank holiday.
There's still plenty of fears around that the rally is
running out of steam and that resurgent inflation might force
reluctant policy makers to pull the plug on quantitative easing
in a disorderly way.
In the meantime though, the yield on benchmark 10-year U.S.
Treasury note is at 1.3%, down from last week's
two-week high of 1.375%.
In the euro zone, where the economy is bouncing back amid
trillions of euros worth of monetary and fiscal stimulus, labour
shortages and production bottlenecks, German 10-year bonds yield
-0.42% .
Oil prices pared early gains on Monday, off more than
three-week highs reached earlier in the session as a powerful
hurricane ploughing through the Gulf of Mexico forced shutdowns
and evacuations of hundreds of offshore oil platforms.
Gold is steady, with the spot price at $1,816.2 per
ounce, down 0.1%, having touched its highest in three weeks
earlier in the session.
Key developments that should provide more direction to markets
on Monday:
-Japan's retail sales extend gains but COVID-19 challenges
persist
-Thai July factory output slows from virus curbs, outbreaks
-Eurozone business sentiment indexes consumer inflation
expectations
-Preliminary German CPI/HICP
-Emerging markets: Colombia central bank
-U.S. pending new home sales data
-U.S. 6-month and 3 mth bill auctions
(Julien Ponthus)
*****