We’ve seen a bit more consolidation across global markets over the last few trading sessions as the market has digested political machinations in both the US and Australia but remained hopefully optimistic on global trade. The main focus for the day was the latest Fed minutes and they came out pretty much in line with market expectations with the Fed still in line for gradual rate hikes in line with a healthy US economy. They acknowledged the continued strength of the labour market and predicted inflation will remain stable whilst still noting the topside risk. The stock markets were mixed in the aftermath of the Fed minutes and are set to continue that way in Asian today with the market now focussing on the Jackson Hole symposium and Jerome Powell’s speech.
It’s been a very rocky start to the day for Australian PM Malcolm Turnbull and the Aussie dollar, resignations from key staff have hit the PM and talk is continuing throughout the morning that there will be another leadership challenge at some point today. The Aussie has dropped over 0.5% so far this morning and could go even further as political speculation leads to further uncertainty. The PM has been losing popularity in the polls but as far as the markets are concerned he’s been a steady hand at the tiller for the Australian economy and that’s why we’re seeing this move to the downside in the currency.
Looking ahead to the rest of today’s trading and the news wires look set to influence flows and market moves once again. We’re relatively light on the ground in terms of economic data releases until we hit the ECB’s Monetary Policy Meeting Minutes this evening. But the news wires should be humming along nicely with the fragile political situations in the US and Australia still front of mind for investors as well the meeting of major international economic players in Jackson Hole commencing tomorrow.