Although August and September tend to be weak months for stock markets, global markets are facing additional challenges of late, stemming from a continued political turmoil in Washington and the financial announcements from the annual summit in Jackson Hole later this week. Traders remain worried that U.S. President Donald Trump will not be able to advance the economic agenda that was the cornerstone of his electoral victory.The firing of White House chief strategist (and staunch protectionist) Steve Bannon on Friday was cheered on by traders, briefly rallying Wall Street shares, but the news was ultimately unable to keep the markets in positive territory.
Asian shares were mixed in early Asian trade, with South Korea’s Kospi down 0.19 percent as of 10:18 a.m. HK/SIN, but the Shanghai composite up 0.29 percent and MSCI’s broadest index of shares outside Japan trading 0.71 percent higher.
On the currency markets, the dollar headed tentatively away from four-month lows against the yen, up 0.04 percent to 109.21 yen. The dollar fell to as low as 108.605 yen on Friday, a low not seen since April. The euro remained squarely in range against the greenback, trading at $1.1758. All eyes are now on the meeting of the world’s central bankers which will be held in Jackson Hole, Wyoming later this week. On Wednesday, Federal Reserve Chair Janet Yellen will be speaking as will European Central Bank Chair Mario Draghi. Traders are looking for signs about a possible U.S. interest rate hike in Q4 and insights into Yellen’s assessment of market stability which may impact policy moving forward.
