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Cautious, waiting for Jackson Hole According to Reuters


© Reuters. FILE PHOTO: A trader works at the stock exchange in Frankfurt, Germany, February 9, 2020. REUTERS / Kai Pfaffenbach

(Fix typo in subject line.)

Anshuman Daga has a look at upcoming dates in European and global markets from Anshuman Daga.

While Asian stocks managed to post modest gains on Thursday, there was an air of heavy caution among investors ahead of what could prove core central bank rallying.

Markets are bracing for the US central bank to double down on its pledge to reduce inflation as Federal Reserve Chairman Jerome Powell prepares to speak at the annual summit in Jackson Hole, Wyoming.

Europe is even more messed up.

The euro area faces a double-whammy of worsening growth expectations, while the risk of higher inflation is growing.

Market attention is on Thursday’s minutes from the European Central Bank’s last policy meeting that looked hawkish.

The ECB raised interest rates 50 basis points higher than expected last month to 0%, and economists expect the central bank won’t give up as it seeks to quell inflation.

Gross domestic product data in Germany – no growth expected in the June quarter – along with the IFO business climate index should provide further clues on how Europe’s largest economy is performing. .

Meanwhile, analysts are turning bearish in the stock market, after a brief respite over the past two months.

A Reuters poll showed concerns about energy shortages, anemic growth and soaring inflation were likely to stall European markets.

The euro, which is touching a 20-year low of $0.99005, has been battered by growth concerns, with an energy crisis adding to the bleak outlook.

Yields on German and British bonds have risen recently as investors worry about soaring inflation that shows little sign of abating.

In Asia, interest rate hikes are still a big concern.

South Korea’s central bank has become the latest to raise its key interest rate by 25 basis points and signal the need for further increases to rein in inflation, which is at a 24-year high.

Graphics: More expensive by month – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/jnvwendkkvw/chart.png

Key developments that could affect the market on Thursday:

Economic data: German Q2 GDP, German IFO business climate index, French business climate

ECB announces July policy meeting account

Jackson Hole Symposium Begins (ends Aug. 27)

(Story assembled to correct a typo in the headline.)

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