Markets slump after Powell confirms rate hikes will continue - 29.8.2022

The Dollar strengthening is intact currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.4% on Friday despite Bureau of Economic Analysis report the personal consumption expenditures price index, Fed’s preferred gauge for inflation, dipped 0.1% in July from June, and slowed to 6.3% from 6.8% over year.

Both EUR/USD and GBP/USD reversed their climbing Friday as GfK reported consumer sentiment for September continued to deteriorate while UK energy regulator Ofgem announced its latest increase in the country’s energy price cap and gave a bleak guidance on deepening cost-of-living crisis. Both Pound and euro are lower against the Dollar currently. USD/JPY reversed its sliding Friday while AUD/USD reversed its climbing with both the yen and Australian dollar lower against the Greenback currently still.

Futures on US equity benchmarks are down currently after US stocks sold off on Friday as Powell reiterated his commitment to halting inflation. The three main US stock benchmarks recorded daily losses ranging from 3.0% to 3.9% - registering losses for the week too.

European stock indexes futures are down currently after ending lower on Friday with retail and travel and leisure shares leading losses. Asian indexes futures are mostly lower today with Japan’s Nikkei Index leading losses while data over the weekend showed China’s industrial profits continued to decline in July.

Brent is extending gains today as expectations of a supply cut by the OPEC offset heightened concerns over an economic slowdown concerns after Fed’s chair Powell’s speech at Jackson Hole. Prices edged up Friday.  West Texas Intermediate (WTI) futures gained 0.6% and is higher currently. Brent crude added 1.7% to $100.99 a barrel on Friday. Both benchmarks gained over 2% on the week.