Confidence is returning to markets, with bond yields drifting and equities on the rise. US headline GDP growth was 1.5% p.a., in line with expectations, inflation remains within the boundaries predicted. The US PCE inflation indicator revealed only slightly heated levels, which calmed markets, while energy prices settled at elevated levels. The US Dollar remained steady, allowing the EUR to trade around 1.1650, while the GBP trade just below 1.3600. The Jackson Hole global Central Bankers meeting, opened for their two-day symposium, awaiting the address of Federal Reserve Chairman Warsh address later today.
Australian inflation came in higher than expected, 3.5%, although slightly lower on an annualised basis. The hotter inflation number is driven by higher energy costs and remains a threat, adding further pressure, on the RBA to raise rates. This also added upward momentum to the AUD which spiked back toward 0.7200, out-performing nearly all other currencies, while the NZD traded around 0.5950. All eyes are on Jackson Hole.
