European shares rose on Friday, while the US dollar rose ahead of a widely anticipated speech by Federal Reserve Chairman Jay Powell at the Jackson Hole conference of central bankers.
The Stoxx Europe 600 index in the region was up 0.5% in early trades. London’s FTSE 100 rose 0.7%.
In Asia, Hong Kong’s Hang Seng index rose 0.7 per cent and mainland China’s CSI 300 index fell back 0.2 per cent, after rising in the session before China’s announcement. stimulus.
Those moves come on the second day of the Jackson Hole economic symposium in Wyoming, with US central bank Powell to speak after the session. The event, organized by the Kansas City branch of the Fed, is closely watched by investors for signals on the future direction of monetary policy.
Wall Street futures slid lower on Friday morning, with contracts tracking the S&P 500 down 0.2 percent, after the broad index closed 1.4 percent higher on Thursday. In currency terms, the dollar was up 0.2 percent against a basket of six other currencies, with the euro down 0.2 percent to trade below par at $0.995.
“We’re not going to learn more than we already know,” said Jim Paulsen, investment strategist at The Leuthold Group. “The Fed is going to raise rates again in September, they are getting a little more dovish than they used to but that’s not surprising considering how hawkish they have been.
“All that said, there’s no denying that [the speeches] market move. For day traders, this is extremely important.”
Economists at Deutsche Bank don’t expect Powell to offer “clear guidance” for the next Fed meeting, but they do expect the president of the central bank of the world’s largest economy to “tilt the views.” its hawkish review to ensure that the Fed’s anti-inflation information is unquestionable.”
Futures markets indicate that investors are expecting US interest rates to rise to 3.7% in early 2023, up from expectations in early August of 3.3%. The Fed’s current target range is 2.25 to 2.50%, after increase borrowing costs rose 0.75 percentage points in two consecutive meetings in an attempt to tame the rapid pace of price increases.
New figures released late Friday could provide further clues about the health of US consumers, with data on personal income and spending, as well as a consumer sentiment index. of the University of Michigan.
In the government bond market, the yield on 10-year US Treasuries – considered a proxy for borrowing costs around the world – added 0.05 percentage points to 3.07% at the end of the year. Friday when the price of the benchmark debt instrument falls lower. The equivalent German Bund yield adds 0.02 percentage points to 1.34 percent.
