Market Brief, North America

Financial markets are in stasis this morning ahead of a series of monetary policy speeches at the Jackson Hole Economic Symposium. Treasury yields are up slightly and equity futures are licking their wounds after yesterday’s buy-on-rumour, sell-on-news dynamic in Nvidia shares saw the major indexes lose altitude. Trade-weighted measures of the dollar are holding near three-month highs as market participants bet Federal Reserve chair Jerome Powell will deliver a relatively-hawkish “higher for longer” message, followed by a more dovishly-cautious one from the European Central Bank’s Christine Lagarde. Both the euro and pound are oscillating around key technical levels, and modest...

Investor demand for US assets continues to grow at an untrammelled pace this morning as signs of softness emerge in other areas of the global economy. Ten-year Treasury yields are down roughly six basis points to 4.26 percent, but benchmark rates are declining much more rapidly in the UK and euro area after a series of purchasing manager surveys pointed to wider weakness and diminished the case for further monetary tightening. The dollar is stronger against all of its major rivals – with the Japanese yen marking the lone exception. US equity futures are higher ahead of an earnings release...

Treasury markets are pausing for breath after a sell-off that drove yields to post-2007 highs, equity futures are seeing a modestly-stronger tech-powered open, and the dollar is slightly softer against its major counterparts. One-month implied volatility in the equity and currency markets remains depressed relative to history, even as the level of turbulence in Treasury markets hits elevated levels. This is reflective of the extent to which global rates are moving in sync with US yields, but also looks fragile as we move through the typical late-August lull and enter more strained global conditions in the early autumn. We rarely...

Financial markets are facing headwinds this morning from higher interest rates and a slowing Chinese economy. Equity futures are setting up for a lower open, US Treasury yields are inching lower after again challenging multi-decade highs during yesterday’s session, and commodity prices are trading sideways as markets simultaneously downgrade Chinese demand forecasts and raise stimulus expectations. Foreign exchange markets are trading on a mixed footing, with risk-sensitive currencies fighting an increase in implied volatility expectations – partly seasonal, partly rates-driven, and partly China-related – even as domestic yields play catch up with the United States North America Expectations are rising ahead...