Week ahead: The Last of the “Dog Days of Summer”

Fundamental analysis of Forex market

Powell ultimately didn’t say anything new, so this week’s price action is likely to shift from a focus on Fedspeak to underlying economic data…

Well, that was an ugly end to an otherwise quiet week for risk assets!

Equity and FX traders certainly read a hawkish message into Fed Chairman Powell’s Jackson Hole keynote address on Friday, though bond traders were a bit more circumspect, with short-term Treasury yields merely edging higher. We’ll delve into the details below, but Powell ultimately didn’t say anything new, so this week’s price action is likely to shift from a focus on Fedspeak to underlying economic data, with Wednesday’s Eurozone CPI report and Friday’s US Non-Farm Payrolls report getting top billing.

Jackson Hole Symposium recap

In our immediate reaction to the Fed Chairman’s highly-anticipated comments, we noted that “Mr. Powell clearly hit a hawkish note, emphasizing the importance of leaving policy tight until inflation was thoroughly licked. That said, he left the door open to a slowdown in rate hikes as soon as September, meaning economic data will be critical in tipping the Fed’s hand in the coming weeks.” Traders seemingly agreed, with the market-implied probabilities of a 75bps interest rate hike next month remaining around the 50% level. Ultimately, the Fed is keen to emphasize its inflation fighting bona fides, even if it means tipping the US economy into a recession in the coming quarters. Moving forward, economic data will determine how high, and for how long, the central bank will feel compelled to raise rates.

Notably, Powell’s Jackson Hole palaver took place immediately after the release of the July iteration of Fed’s preferred inflation measure, the Core PCE price index. The report came in a touch cooler than expected at 4.6% y/y, adding to the evidence that inflation may have peaked, though it remains well above the Fed’s target level. It will take a continued moderation in this indicator in the coming months to soften Jerome Powell and company’s hawkish stance.

US Non-Farm Payrolls (NFP) preview

In the wake of the Jackson Hole festivities, traders will be eagerly awaiting Friday’s marquee US jobs report. Non-Farm Payrolls (NFP) have remained relatively strong, despite the recent slowdown in other US economic data. After four months of creating roughly 400K net new jobs, the US economy saw strong jobs growth in excess of 500K jobs in July, but economists are, once again, expecting a slowdown to closer to 290K net new jobs in August. After four straight better-than-expected readings, will economists finally nail a (slight) slowdown in the labor market? Or will NFP continue to defy the broader economic trends and show an ever-tightening jobs market?

Stay tuned for Thursday’s full NFP preview report to get our analysis based on the leading indicators!


Earnings season is essentially over, setting up a relatively quiet six weeks or so for major US stocks, though there will still be sporadic notable reports to watch. Recapping the (vast majority of) the earnings season that was, approximately three-in-four of the companies in the S&P 500 beat earnings estimates, a tick below the five-year average of 77% while closer to 70% of companies beat revenue estimates, in-line with the five-year average of 69%. All in all, it was a relatively sanguine earnings season, albeit with some big individual surprises. Looking ahead, traders will be keen to watch guidance as both energy prices and interest rates continue to rise across the globe.

Earnings due out this week include the following tickers:


Economic Data

Outside of the aforementioned US NFP report, the other big highlight to watch in the coming week will be the Flash Eurozone CPI estimate for August (released on Wednesday). Traders and economists are expecting the headline reading to come in at 9.0% after last month’s 8.9% print, with the Core CPI figure to come in at 4.0%, in-line with last month. Energy prices will be a major focus for traders heading into the cooler months, and with inflation likely to show no signs of slowing in the interim, the report could reaffirm the dire situation the European Central Bank (and European citizens broadly) will face in the coming months.

Other economic releases to watch this week include the following reports:


  • AU Retail Sales
  • UK Bank Holiday


  • JP Employment Report
  • AU Building Approvals
  • German Preliminary CPI
  • UK Mortgage Approvals
  • US Consumer Confidence
  • US JOLTS Job Openings
  • FOMC Member Williams Speech


  • JP Industrial Production and Retail Sales
  • JP Consumer Confidence and Housing Starts
  • NZ Business Confidence
  • AU Private Sector Credit
  • CN Manufacturing and Non-Manufacturing PMIs
  • German Employment Report
  • Eurozone CPI
  • FOMC Member Mester Speech
  • ADP Employment Report
  • CA GDP
  • US Chicago PMI
  • US Crude Oil Inventories


  • JP Capital Spending and Final Manufacturing PMI
  • AU Private Capital Expenditures
  • CN Caixin Manufacturing PMI
  • German Retail Sales
  • Swiss CPI, Manufacturing PMI and Retail Sales
  • Eurozone Final Manufacturing PMI
  • UK Final Manufacturing PMI
  • US Challenger Job Cuts
  • US Initial Unemployment Claims and ISM Manufacturing PMI
  • CA Manufacturing PMI


  • German Trade Balance
  • Eurozone PPI
  • US Non-Farm Payrolls

Chart of the Week: Nasdaq 100 (US Tech 100)

Source: Tradingview, StoneX

The technology-focused Nasdaq 100 index rallied nearly 25% from its June lows through mid-August to peek above its 200-day EMA, but the price action over the last couple of weeks suggests that the longer-term downtrend may now be resuming. As the chart above shows, the Nasdaq 100 fell sharply to start last week’s trade, and after failing to form a meaningful rally all week, the index saw strong selling pressure to close near the lowest levels of the week. With little in the way of previous support nearby, readers will want to be cautious when trying to pick out any short- or medium-term bottoms in US technology stocks.

Have a great weekend!

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