UK sees lack of economic announcements
In London, traders are in long-weekend mode as there has been little in the way of UK corporate news, and even less in terms of economic announcements; the much awaited Jackson Hole symposium didn’t shine any light on the interest rate decision either. In typical central banker fashion Ms Yellen did a lot of talking but said very little. I get the impression that Ms Yellen doesn’t want to risk increasing interest rates too soon.
German stocks remain very sensitive to the Russian situation. There is a growing sense that progress is being made, but one nasty turn and the DAX could be knocking on 9000.
Dow Jones edging back to 17,000
In the US, the Dow Jones is creeping back towards 17,000. Traders didn’t receive the usual green light that rates will remain rock at bottom for a prolonged period after QE ends, but neither were they spooked by the possibility of a rate rise any time soon; if in doubt take money off the table.
Copper bounces back
Gold doesn’t have a golden outlook, the easing of tensions between Ukraine and Russia has removed the risk-off attractiveness, and the strong dollar isn’t helping the precious metal either. Copper has bounced back despite Chinese manufacturing easing up. China’s central bank is quite keen to add liquidity, and rumblings that Beijing won’t hit its growth target have brought on stimulus speculation.
Euro suffers from strong dollar
Today it's all about the US dollar; traders waited around all day just to hear what we already know, the US economy is moving in the right direction but we are still none the wiser as to when rates will be raised. We are seeing more division between Federal Reserve members, which may suggest that a rate rise is coming.