Asian equities could trade choppy after a volatile session on Wall Street with participants waiting for Central Bankers’ guidance at the Jackson Hole symposium. The key focus remains on Fed Chair Powell’s comments during the event, scheduled for Friday. Commodities prices are on the radar as a firm bid was seen across the board with agricultural goods strengthening and metals also stronger with industrial power restrictions in China supporting copper and iron prices.
In China, worries are growing about the potential negative effects on macro policy and the economy as authorities have stepped up emergency actions to deal with severe heat and a crippling drought in the country’s southwest. The situation has a cascading effect on electricity supplies in other parts of the country. For the session ahead, traders will be adjusting positioning ahead of the Jackson Hole symposium with a bland macro calendar to affect short-term price action. It is worth continuing to continue watching the US yields and US Dollar price action as yesterday the greenback selling while yields were declining fuelled global cross-asset correlation. However, interest rate probabilities for September are still at 50/50 for a 50bps, or 75bps move with eyes to the Fed’s symposium for more additional clues.
