Global market volatility makes a comeback following the VIX index, commonly known as The ‘fear gauge’ closed at its highest level since mid-July, up 17.26 percent last week. That was the highest since June. The high-tech Nasdaq 100 sank 4.26% in its worst performance since June. This was because the S&P 500 and Dow Jones futures contracts were down 3.5% and 3.12%, respectively.
Things in Europe haven’t looked much better, with the DAX 40 and FTSE 100 down 4.23% and 1.63% respectively. Looking at the Asia-Pacific region, Nikkei 225 futures are losing 1.91% this week. What’s the driving force? causing this volatility? Most come down to the Federal Reserve.
Throughout June and July Traders are setting prices from the Federal Reserve next year, the annual Jackson Hole Economic Symposium spoken by Chairman Jerome Powell last week. Still pouring cold water according to these expectations. Most of the 2023 rate cut forecasts have now been priced and quantitative tightening is ongoing.
As a result, the US dollar strengthened in the past week. The worst performing currencies were the New Zealand dollar, the British pound and the Euro. Gold prices once morest fiat orders also weakened as the dollar strengthened along with Treasury yields. Crude oil prices improved, closing higher last week. This might be due to the growing bet that OPEC+ might curb exports amid falling prices.
All eyes next week turned to the US nonfarm payrolls report for August. Signs that the labor market in the world’s largest economy remains tight. may be a factor supporting the Fed to tighten Risk of market volatility Outside of the United States, China’s manufacturing PMI gives a better idea of how economic growth problems are brewing in the world’s second-largest economy. Determines the inflation rate of the Euro and German regions. What else is waiting for the market next week?
US dollar performance vs. performance currency and gold
Basic forecast:
US Dollar Forecast: Will Another Non-Farm Employment Publication Offer a Tight Labor Market?
The US dollar is recovering during an uptrend once morest the backdrop of the Fed’s extravagance. Quantitative tightening and market volatility Another stricter non-farm payroll report might offer the same.
Euro price forecast: Hawkish Powell sees return of central bank divergence narrative for EUR/USD
EUR/USD enters the week with the market aware of the Fed’s aggressive outlook. As the EU continues to face an energy crisis as we enter the winter.
British Pound (GBP) Forecast: GBP/USD hit by rising inflation, energy prices.
UK consumers and businesses will face skyrocketing energy costs in the coming months. As a result, the UK economy and the British pound face an uncertain future.
Dow Jones and S&P 500 Spotted by Powell Comments – APAC and EU Stocks Should Follow
The Dow Jones Industrial Average and S&P 500 rallied following Fed Chair Powell’s Jackson Hole speech. Asian and European stocks are likely to be under pressure this week.
Australian Dollar Outlook: RBA in Fed’s Shadow For Now
The Australian dollar had a weak week following China’s stimulus package was finalized by the Federal Reserve, which made it difficult to talk regarding campfires in ski resorts.
Bitcoin, Ethereum Heavy Sell As Fundamentals Drive Crypto Down
Bitcoin, Ethereum and alt coins were destroyed by the words of Fed Chairman Jerome Powell sending cryptocurrencies and risk assets to the Red Sea. Next up are ISM and NFP, two big data points for risk aversion.
Canadian Dollar Forecast: USDCAD Scores Rise as Jerome Powell’s Jackson Hole Words
After Jerome Powell’s Jackson Hole Speech, USDCAD Rises To 1.3100 Upside May Be Constrained By Oil Strength
Technical forecasts:
US Dollar Technical Analysis: EUR/USD, GBP/USD, USD/CAD, USD/JPY
It’s been a wild week in the US dollar. But the cows continued to brew as Powell took it a step further. The bigger question is whether EURUSD will fall below parity.
S&P 500, Nasdaq 100, Dow Jones Forecast for Next Week
Stocks hit hard Friday on the back of Powell Hawks at Jackson Hole; The overall trend is negative, which has just been added.
Crude Oil Forecast: WTI under pressure at 95.00 and 200-SMA key levels provide technical hurdles.
WTI has struggled to take profits earlier this week as technical hurdles come into play. The 95.00 level creates a lot of convergence that might cause another upside to occur next week.
Gold and Silver Technical Forecast: Precious Metals at Risk
Gold’s recent advances are capped at the 50 SMA as silver approaches a key support zone. which may penetrate below Highlights of levels recently seen in 2020
The USD/JPY trend continues to build amid the positive slope in the 50-day SMA.
USD/JPY may continue to show an uptrend as exchange rates appear to track a positive slope in the 50-Day SMA (135.74).
