Bulls were in the front seat for financial markets this past week, with stock markets across the world rising. On Wall Street[1], the Nasdaq[2] Composite, S&P 500[3] and Dow Jones gained about 2.8%, 1.5% and 0.9% respectively. In Europe, the FTSE 100[4] and Euro[5] Stoxx[6] 50 climbed 0.85% and 1.05% respectively. In the Asia-Pacific region, Japan’s Nikkei 225[7] rose 2.32% to end the week.
All eyes were on the Federal Reserve’s Jackson Hole Economic Policy Symposium. There, it seemed that the central bank disappointed[8] those looking for more clear-cut tapering timeline cues. While Chair Jerome Powell said that it could be appropriate to begin the process this year, he still fretted about the labor market, where there is “much ground to cover” to hit maximum employment.
Treasury yields weakened alongside broad underperformance in the anti-risk US Dollar[9] and similarly-behaving Japanese Yen[10]. The sentiment-linked Australian and New Zealand Dollars mostly outperformed their G10 counterparts. Still, the 10-year rate remains higher than where it started last week, likely reflecting global growth optimism as the Pfizer vaccine was granted full FDA approval in the US.
Weakness in the US Dollar and improving market sentiment bolstered commodity prices. WTI[11] crude oil prices[12] soared almost 11% in the best week since June 2020. Gold[13] gained about 2%. DCE iron ore and LME copper[14] futures rose about 8.3% and 4.5% respectively. Will this cheery dynamic be sustained heading into September?
All eyes turn to August’s US non-farm payrolls. The nation may add 750k positions. Looking at the Citi Economic Surprise Index, US data
