The strongest to weakest of the major currencies

The next trading day after Jackson Hole is off and away in the North American session and it begins with the EUR as the strongest of the major currencies , the JPY is the weakest. The USD is the 2nd strongest of the major currencies after moving sharply higher on Friday. Chair Powell was direct and to the point (see Adam's summary here and watch my video here) about raising rates, keeping rates higher for longer and slaying the inflation devil.

Meanwhile ECBs Schnabel echoed Powell's views on Saturday at Jackson Hole saying:

  • "Even if we enter a recession, we have little choice but to continue the normalization path,"
  • "If there was a de-anchoring of inflation expectations, the effect on the economy would be even worse."
  • Said rates need to stay high, cautioned against pausing on early signs of a potential turn in inflationary pressures - central bank rate setters should instead signal their "strong determination" to bring inflation back to target quickly

A 75 basis point hike is likely to be discuss at the next ECB meeting.

Stocks are lower. US yields higher. Oil is higher as it battles with the idea that Iran oil may enter the market given an lessening of sanctions on a nuclear deal, but Saudi Arabia is hinting of lowering supply at the next meeting. Oil demand is higher again with US exports while inventory levels have seen bigger than expected drawdowns over the last few months.

UK's on holiday in observance of summer bank holiday.

Focus will now shift to the US jobs report on Friday were expectations are for a gain of 295K for US jobs and the unemployment report remaining study a 3.5%.

A snapshot of the markets are showing:

  • Spot gold is trading down $10.24 or -0.60% at $1726.42.
  • Spot silver is trading down $0.25 or -1.35% at $18.60.
  • WTI crude oil is trading up $0.51 at $93.56
  • the price bitcoin is back below the $20,000 level at $19,819
  • natural gas is up $0.10 and $9.36

In the premarket for US stocks, the major indices are lower after sharp declines on Friday:

  • Dow industrial average -258 points after Friday's -1008.38 point decline
  • S&P index -36.5 points after Friday's -141.45 point decline
  • NASDAQ index is down -146 points after Friday's -197.56 point decline

In the European equity markets the major indices are also sharply lower:

  • German DAX, -144.23 points or -1.11%
  • France's CAC -104.82 points or -1.67%
  • UK is on a holiday today
  • Spain's Ibex -96.4 points or -1.20%
  • Italy's FTSE MIB -236.14 points or -1.08%

In the US debt market, yields are higher across the board :

US yields
US yields are higher

In the European session, yields are also higher. Note the UK data is from Friday:

European benchmark 10 year yields