Caution is advised ahead of Jackson Hole
LONDON — European markets were mixed on Thursday as global investors awaited the start of the US Federal Reserve’s Jackson Hole economic symposium.
The pan-European Stoxx 600 index hovered fractionally above the flat line late in the morning, having given back gains of more than 0.7% in early trade. Oil and gas stocks rose 1.3% while retail stocks fell 1[ads1].2%.
The Fed’s annual symposium begins on Thursday, with Chairman Jerome Powell due to deliver a speech on Friday. Investors will be listening for information on the central bank’s monetary policy tightening path as it looks to curb inflation, and whether rate cuts are in sight at the end of the current cycle.
Luke Bartholomew, senior economist at Abrdn, said Powell may use the speech to deliver a “mea culpa” on his prediction a year ago that inflation would be “transient” and to demonstrate what the Fed has learned about price pressures over the past year .
“Powell will likely emphasize that policy still has a long way to go before the Fed will feel comfortable it has firmly turned the corner to restore price stability. This is important because the market has recently behaved as if the Fed has swung away from its hawkish stance ,” Bartholomew said in an email Wednesday.
“It’s hard to believe that Fed leadership is comfortable with how economic conditions have become much more accommodative after the last month, and so Powell will use this speech as an opportunity to push back against this more dovish interpretation of Fed policy that has arisen recently. .”
U.S. stock futures rose in early premarket trading Thursday, after Wall Street snapped a three-day losing streak on Wednesday.
Investors in the state will also be closely watching Thursday’s weekly unemployment data and Friday’s PCE (personal consumption expenditures), one of the Fed’s preferred inflation measures.
Shares in Asia-Pacific mostly ticked higher on Thursday, while Hong Kong’s morning session was canceled due to a typhoon warning.
On the data front in Europe, the German Ifo institute’s business climate and expectations surveys and final GDP figures for the second quarter from Europe’s largest economy were published on Thursday.
