US open: Wall Street heads higher with Fed Powell, PCE data in focus
Fiona Cincotta August 27, 2021 8:13 AM
Wall street heads higher as investors await Fed Powell's speech and any possible clues over how and when the Fed could taper bond purchases. PCE data is due beforehand.
Dow futures +0.2% at 35282
S&P futures +0.22% at 4480
Nasdaq futures +0.25% at 15319
FTSE -0.19% at 7111
Dax -0.15% at 15776
Euro Stoxx -0.05% at 4167
Futures higher ahead of Powell
US stocks are set to open on the front foot ahead of Powell’s key note speech at the annual Jackson Hole Symposium. Without any question of doubt this has been the central focus for the markets across the week and across the quiet summer month of August. The event isd often used as a platform to signal a change in policy.
Will Fed Chair Powell give any clues over how and when monetary policy will be eased?
The broad expectation is that Fed Powell will provide some guidance, particularly after the hawkish comments from Fed speakers yesterday. However, there is also a very real risk that the market is going to be disappointed here. Powell bringing nothing new to the table and kicking the can down the road into Autumn, due to the rise of delta cases and slowing economic recovery, could drag the US dollar lower whilst boosting stocks to record highs.
Prior to the speech investors will be watching US PCE inflation numbers closely. These are the Fed’s preferred measure of inflation. Core PCE is expected to rise to 3.6% YoY in July up from 3.5% as it remains around a 30 year high.
Where next for the Dow Jones?
The Nasdaq has been trending higher within an ascending channel since mid-May. The price currently trades arounds the mid-point of that channel, hitting an all time high of 13400. However the bearish divergence in the RSI points to slowing momentum. Meanwhile the Doji candle highlights indecision ahead of Powell’s speech. A move above 15400 is needed to reach fresh all-time highs with15875 the upper band of the channel as a potential channel. On the flip side a move below 15150 could negate the near term up trend whilst a move below 14900 the 50 sma and lower band of the channel could see sellers gain traction.
FX markets muted ahead of Powell
There is very little going on in the FX markets as traders sit on the sidelines ahead of a key afternoon for the US Dollar.
The US Dollar is holding steady with all eyes on PCE data and Fed Chair Jerome Powell’s speech later today at Jackson Hole. The greenback holds onto gains from the previous session following a strong of hawkish commentary from Fed officials.
AUD/USD is outperforming peers although that’s not difficult given the lack of movement across the majors. The Aussie is tracing metal prices higher shrugging off weaker than expected retail sales data. Retail sales contracted -2.7% in July, down from -1.8% in June amid expanding lockdown restrictions.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.