This is what you need to know to trade today Monday, August 23:
Market sentiment has improved amid speculation that the Fed will refrain from adjusting its monetary policy early due to the rapid spread of the Delta variant of covid. The safe-haven US dollar is reversing some of its gains. Preliminary PMIs are of interest on the economic calendar and Bitcoin is on the rise.
Risk: After a week dominated by concerns that the Federal Reserve would announce a reduction in its bond buying program, investors are now anticipating a delay. Robert Kaplan, chairman of the Dallas branch of the Fed, said he would consider postponing such a move in response to the impact of the Delta variant of covid. Kaplan is a hawk and had previously pushed to withdraw stimuli.
The focus is on the Simposio Jackson Hole of the Fed and President Jerome Powell’s speech on Friday. Over the weekend, the central bank announced that the event would take place virtually, a move that is seen as recognizing the severity of the current wave of the disease.
Some speculate that Powell could use the Jackson Hole speech to signal a delay in withdrawing the stimuli instead of overtaking it. Markets are buoyed by news that the White House would extend Powell’s term as Fed chairman for another four years.
Coronavirus cases in the United States have reached a daily average of 149,000, ten times more than in early June. Hospitals in several southern states remain stressed. On the other hand, China said it has eliminated the spread of the Delta strain, allowing the lifting of lockdowns in the world’s second-largest economy.
The optimistic mood in the markets has pushed the safe-haven dollar lower with the EUR/USD recapturing 1.17. Markit’s preliminary purchasing manager indices for August will be released in the morning and remain in high ground.
See: Selling opportunity on the dollar? Three reasons why the King can crash
The UK PMI they are of interest to the pound, which is struggling with stubbornly high British COVID cases. The GBP/USD It is trading around 1.3650.
Improving market sentiment is also supporting oil prices, with the WTI exceeding $ 63. Gold is around $ 1,785, within familiar ranges.
Cryptocurrencies had a successful weekend,with Bitcoin climbing above $ 50,000, the highest levels since May. Ethereum is trading above $ 3,300 and other digital assets like Cardano and Dogecoin are on the move.
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