Equities in Asia, as well as US and European equity futures, had a "wobbly" Asian session following a US session where equities posted modest gains. The move points to continued caution ahead of Jackson Hole tomorrow, with US rate-cut bets building up this week. Risk-taking may be capped today due to concerns that there could be disappointing news from the Fed—despite dovish signals from the Fed minutes yesterday.
There were some better-than-expected results for Xiaomi Corp., which led to an 8% bounce in its stock price, supporting a gauge of Chinese tech stocks. However, this followed a slew of mixed earnings from heavyweights, which seems to be preventing a lot of confidence from returning. There is also news of a likely revision to US job growth data—the number of workers on payrolls will probably be revised down by 818,000 for the 12 months through March (~68,000 less per month). This is the largest downward revision since 2009 and provides further evidence for traders to expect a September rate cut, with the futures curve now pricing in just over 100 bps by the end of the year.
WTI fell to $71.84/barrel, and gold fell to $2,503.40/oz after hitting all-time highs yesterday.
On the data front today, we have:
- Eurozone HCOB PMI
- ECB account publication of the July rate decision
- US initial jobless claims and existing home sales
