The past trading week was characterized in particular by an eagerly awaited speech at the economic symposium in Jackson Hole by Fed Chairman Jerome Powell, which is expected this afternoon.
In addition to the transcripts of the latest US Federal Reserve meeting published in the middle of the week, investors also had to digest a number of purchasing managers on both sides of the Atlantic. With regard to the Ukraine-Russia conflict, market players are likely to continue to focus on the continuation of possible peace talks.
DAX
Source: TradingView
After talks in the White House - investors still hope for peace in the Ukraine-Russia conflict
At the beginning of the week, developments in the talks regarding the Ukraine-Russia conflict were the first topic of discussion. US President Donald Trump had invited various EU heads of state and Ukrainian President Zelensky to the White House to discuss a possible peace in Ukraine. It remains to be seen whether there will now be a meeting between Kremlin leader Putin and Zelensky. Trump, among others, had announced a bilateral meeting between the two presidents within two weeks.
Economic symposium in Jackson Hole has been running since Thursday
The economic symposium in Jackson Hole (Wyoming), which has been running since Thursday, is also likely to have cast its shadow. Central bankers, politicians, business representatives and economists from all over the world are coming together from August 21 to 23 to discuss issues such as the shape of monetary policy.
Fed minutes provide no real impetus - Little support for rate cuts at July meeting
"Nearly all participants considered it appropriate to leave the target range for the federal funds rate at 4.25 to 4.50 percent at this meeting," according to the minutes of the meeting on July 29 and 30. However, Fed Vice Chair Michelle Bowman and Fed Governor Christopher Waller voted against the decision. Both would be in favor of a reduction of a quarter of a percentage point in order to counteract a weakening of the job market.
At the beginning of the month, the US labor market data was indeed strangely weak.
The dwindling interest rate cut expectations in recent days have acted as a negative factor for the stock markets in both Germany and the USA. The CME Group's "Fed Watch Tool" currently estimates the chance of a rate cut of 25 basis points at the upcoming meeting on September 17 at just 71.4%, down from 85.4% a week ago.
Purchasing managers in Germany with a mixed picture - US values above expectations
The purchasing managers (HCOB) for the manufacturing industry and overall were slightly better than expected for Germany as the eurozone, while the service sector remained below expectations. In the USA, the counterparts (S&P Global) all significantly exceeded expectations.
German GDP slumps more than expected - Powell speech in focus from 16:00
The German economy declined more sharply in the second quarter than previously assumed. The so-called gross domestic product (GDP) shrank by 0.3 percent in the period from April to June compared to the previous quarter, as announced by the Federal Statistical Office on Friday. In an initial estimate, a decline of 0.1 percent had been assumed.
A speech by Fed Chairman Jerome Powell at the central bankers' meeting in Jackson Hole today, which is expected at 16:00, could decide the fate of the Fed. Investors have been eagerly awaiting this speech for days. The expectation of possible interest rate cut signals is high and the potential for disappointment in this context is possibly pronounced.
Dow Jones Industrial Average Index
Source: TradingView
