Caution reigns ahead of Jackson Hole

LONDON – European markets edged higher on Thursday as global investors awaited the opening US Federal ReserveJackson Hole Economic Symposium.

Pan-European Stoxx 600 Index Gaining 0.7% in early trade, basic resources were the leading gainers, adding 1.2%, as all sectors and major bourses entered positive territory.

The Fed’s annual symposium opens on Thursday, with Chairman Jerome Powell scheduled to deliver a speech on Friday. Investors will be looking for information on the central bank’s tendency to contain inflation and whether interest rate cuts are in sight at the end of the current cycle.

Luke Bartholomew, Senior Economist AbrdnPowell said he could use the speech to provide a “mea culpa” to his prediction a year ago that inflation would be “moderate” and to demonstrate what the Fed has learned about price pressures over the past year.

“The hawkish stance is likely to emphasize that Powell has a long way to go before the Fed is comfortable,” Bartholomew said in an email Wednesday.

“It’s hard to believe that Fed leadership is comfortable with how financial conditions have become more accommodative since last month, so Powell will use this speech as an opportunity to push back against this poor interpretation of Fed policy that has emerged recently.”

US stock futures Wall Street jumped in early market trading on Thursday after snapping a three-day losing streak on Wednesday.

Investors across the country will be closely watching Thursday’s weekly jobless claims data and Friday’s PCE (personal consumption expenditure) reading, one of the central bank’s favorite inflation measures.

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Asia-Pacific shares Thursday was mostly higher, while Hong Kong’s morning session was canceled due to a typhoon warning.

On Europe’s data front, Germany’s Ifo Institute’s Business Climate and Expectations Survey will be released Thursday morning, after final second-quarter GDP figures from Europe’s largest economy.

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