Jackson Hole

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The Jackson Hole symposium, an annual economic policy conference sponsored by the Federal Reserve Bank of Kansas City, has arrived. And Jerome Powell's speech will be the highlight. We look at what impact it could have on AUD/USD.

The annual Jackson Hole symposium has arrived, and once again Jerome Powell will be the highlight of the event. Last year his speech marked the beginning of a 20% decline for the S&P 500 (which was already in a bear market), so his words clearly packed a punch. We also have retail sales data for the UK, Canada and the US and earnings from a few US companies can also help us measure consumer sentiment.

The US dollar was the clear winner following Jerome Powell's Jackson Hole speech, and Wall Street the clear loser - with rates unlikely to come down any time soon.

Jerome Powell will be hoping that inflation data, released just 90 minutes before his Jackson Hole speech, softens as expected.

Whilst US PMI data disappointed, it’s not as though the economic deterioration we’re witnessing didn’t come without plenty of warning. And the upshot all this is that it's deflationary.

Jerome Powell is likely to lay out a relatively hawkish outlook for monetary policy in our view, prompting traders to start pricing in a 75bps interest rate hike next month as the odds-on scenario...

A combination of rising volatility levels, market sentiment and pending events such as US inflation and Jackson Hole has seen a pickup in volatility and selloff across stock market indices.