Sentiment Improves Ahead of Jackson Hole Symposium

EU in troubles

The largest economy in the Eurozone and the major driver of development, Germany, reported second-quarter GDP growth of just 0.1%, which brought attention to the publication of the Ifo business environment index later in the session.

This indicator is predicted to decline to 86.8 in August from 88.6 in July, adding to the signs that the continent’s largest economy is about to enter a recession.

Also expected later on Thursday are the minutes from the most recent policy meeting of the European Central Bank. In an effort to cool off rapidly rising inflation, the ECB raised interest rates by a larger-than-expected 50 basis points at its meeting last month. The account is therefore likely to be hawkish.

Elsewhere in China, Vice Minister of Human Resources and Social Security Li Zhong said Beijing will prioritize creating more employment and advancing fiscal and monetary policies following the introduction of a 146 billion USD stimulus plan by the Chinese Cabinet on Wednesday. The Shanghai Composite Index last showed a daily increase of 1%.

On Wednesday, the US announced July Durable Goods Orders, which came in at 273.5 billion USD, almost exactly unchanged, falling short of forecasts for a 0.6% gain. The Nondefense Capital Goods Orders excluding Aircraft reading, however, grew by 0.4%, above the 0.3% forecast.

US Treasury rates meanwhile increased significantly. The yield on the 10-year bond reached 3.1269%, while the yield on the 2-year note jumped to 3.393%. Nevertheless, the USD traded somewhat weaker.