Investors Try to Forget Jackson Hole

By Peter Bukov|

Published: August 30 2022, 07:40 GMT+0

Investors Try to Forget Jackson Hole

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Sentiment has improved notably in the markets, as evident by the rising EU and US equity indices, while the USD has failed to hold its new highs.

China to stimulate the economy

In an effort to improve economic results, China will speed up its efforts to increase demand, stabilize employment, and lower prices in the second half of the year, the nation’s finance ministry announced on Tuesday.

These remarks came after a series of fresh economic stimulus measures, including billions of dollars in policy funding, were unveiled by China’s cabinet last week.

According to the CME FedWatch tool, probabilities for a 75 bps rate rise by the US Federal Reserve have increased to around 70% following the Jackson Hole Symposium. Across the pond, market participants are now estimating odds for a 50 bps move in Europe at 67%, up from 48% on Friday.

Meanwhile, the energy problem was brought back up by Ursula von der Leyen, President of the European Commission, who revealed that the EU is considering an urgent intervention in its energy market to lower increasing power costs.

Oil back in an uptrend

As traders anticipated that the Organization of Petroleum Exporting Countries and its allies (OPEC+) will decrease output to counter any significant fall in crude prices, the WTI benchmark rose by about 4% on Monday and jumped above its 200-day moving average.

The cartel’s dominant country, Saudi Arabia, hinted as much last week, causing crude’s most recent surge.

However, considering that the majority of OPEC+ countries are presently producing far less than their daily limits, markets are now anticipating additional information on how the group would implement its production restrictions. On September 5, the cartel is scheduled to convene, and it is expected that it will discuss the anticipated cutbacks in further length.