Forex Market Recap (22-27 August 2021)

It was a relatively quiet and mixed week for the financial markets as traders awaited the Jackson Hole Economic Symposium. Risk-on sentiment kicked into overdrive on Friday after Fed Chair Jerome Powell gave his speech at the Jackson Hole event, effectively re-iterating that the Fed was a long way away from raising interest rates and that there was still no rush to tapering bond-buying operations.

USD:

• Weekly jobless claims hold around pandemic-era low
• GDP revised higher to 6.6%
• Bullard says the Fed has to ‘get going’ on the taper, may need to get aggressive to stop inflation
• Key US inflation gauge rises 3.6% from a year ago to tie the biggest jump since the early 1990s
• Fed’s Mester says taper should begin this year, end middle of next
• Fed’s Powell holds fast to ‘this year’ timeline for bond-buying taper
• The Supreme Court will allow evictions to resume which could affect millions of tenants

EUR:

• Growth in French business activity eased in August
• German private sector stays on a growth path in August
• German final GDP upgraded from 1.5% to 1.6% in Q2
• German GfK consumer climate index at -1.2 vs. -0.5 forecast
• ECB says new forward guidance does not necessarily mean low-interest rates for longer

GBP:

• UK recovery loses momentum as supply constraints hit output growth in both the manufacturing and service sectors
• Manufacturing output growth eases, while stock adequacy hits new record low
• Retail sales and orders growth soar but supply issues mount

CAD:

• Corporations’ net income before taxes, seasonally adjusted to $105.5B Q2 2021
• Payroll employment rose by 214,800 (+1.3%) in June
• Industrial PPI fell 0.4% m/m in July and was up 15.4% y/y. Raw Materials Price Index (RMPI), was up by 2.2%

JPY:

• BoJ Core CPI y/y: +0.20%
• Services PPI for July: +1.1% vs. 1.3% forecast
• Core consumer prices stop falling for 1st time in 13 months
• Japan further expands virus emergency areas as cases surge
• Consumer price falls narrow on global commodity inflation

AUD:

• Manufacturing PMI slows in August
• Construction work rises 0.8% in Q2, misses forecasts
• Retail sales plunge in July, economy set to shrink

NZD:

• Headline retail sales up 3.3% in Q2 vs. 2.4% forecast
• RBNZ Assistant Governor Hawkesby says rate changes are not tied to lockdowns