Global central bank annual meeting is approaching, and the market is facing the test of volatility again

The annual meeting of the global central bank is approaching, and the market is facing the test of volatility

Last week, the global financial market experienced drastic fluctuations under the baptism of “Super Data Week”, and the situation this week should not be underestimated. Regional conflicts continue to be tense, and with Federal Reserve Chairman Powell coming to an important speech at Jackson Hall annual meeting, market expectations are again ushering in a period of volatility. In addition, the latest research report of the Bank of Japan has also added a gloom to the market for the expectation of interest rate hikes.

Bank of Japan: Expectations of interest rate hikes heat up again

On August 20, two in-depth research reports released by the Bank of Japan became the focus of market attention. The two reports focus on rising service prices and labor shortages, pointing to inflationary pressures faced by the Japanese economy and suggesting that the central bank may have to consider interest rate hikes again. This signal is particularly eye-catching, as the unexpected rate hike at the end of July this year has sent the Japanese stock market a “Black Monday” and has affected global financial markets. Market participants are closely following Bank of Japan Governor Kazuo Ueda’s further elaboration at a congressional hearing on Friday to get more clues about the direction of monetary policy in the future.

Georgeal conflict: Tensional standoff between Iran and Israel

In terms of geopolitics, tensions between Iran and Israel continue to escalate. The Iranian Revolutionary Guard issued a warning that although it took time for retaliation against Israel’s killing of Hamas leaders, it would never be let go. Israeli Prime Minister Netanyahu expressed uncertainty about the ceasefire in the Gaza Strip and the exchange agreement for detained personnel in public, and emphasized that any agreement will be based on the prerequisite of safeguarding Israeli interests. Although the possibility of direct conflict between the two sides in the short term is low, the continued tensions undoubtedly adds instability to global financial markets.

Jackson Hall Annual Meeting: The Fed’s Rate Cut Path to Be Explained

This week, the foreign exchange market will focus on Fed Chairman Powell’s speech at the Jackson Hall Global Central Bank Annual Meeting. The market generally expects Powell to provide clearer guidance on future interest rate cuts. U.S. PPI and CPI data released last week showed inflation slowing, which strengthenedThe market expects the Federal Reserve to continue to cut interest rates by 25 basis points in September. However, the momentum of US economic growth has weakened significantly recently, and many economic indicators are under pressure, which has also caused market concerns about the outlook for the US economy. How Powell’s speech will balance inflation control with economic growth support has become the focus of market attention.

To sum up, global financial markets will still face multiple tests this week. Traders need to pay close attention to the policy trends of central banks, changes in geopolitical situations and the release of economic data to deal with possible market fluctuations.