- As a risk-off sentiment set in at the beginning of a crucial week for financial markets when central bankers convene at their annual retreat in Jackson Hole, US equity futures and European stock indexes declined on Monday.
- S&P 500 and Nasdaq 100 futures both decreased by more than 1%. The yield on the 10-year Treasury note barely changed, while the yield on the two-year note increased by around six basis points, exacerbating the yield-curve inversion that is thought to be a sign of an impending recession. A five-week high was reached by the dollar spot index.
- Following repeated warnings from Federal Reserve policymakers that interest rates are rising, a rise in global shares from the bear market's lows in June that was fuelled by hopes in the market for a switch to slower rate hikes is fizzling. Jerome Powell, the Fed's chair, will have a chance to adjust those bets at the Jackson Hole Symposium. These bets are susceptible to the potential of persistently high price pressures even while economic growth falters.
- The imminent acceleration of the Fed's balance-sheet reduction is becoming more and more apparent to investors. Next month, so-called quantitative tightening ramps up, putting additional pressure on riskier assets that have benefited from plenty of liquidity.
