Powell’s Speech, Consumer Confidence, Nord Stream Leaks – What’s Moving the Markets

Powell’s Speech, Consumer Confidence, Nord Stream Leaks – What’s Moving the Markets

By Jeffrey Smith – Bond markets are quieter, waiting to see if they can scare Federal Reserve Chairman Jerome Powell into more favorable monetary policy. The pound has also become more stable, after a not entirely convincing statement from the Bank of England vowing to keep inflation low. The US government is going to court against JetBlue and American Airlines, while Twitter and Elon Musk continue to file it in their own courtroom. Suspicious leaks from undersea gas pipelines sparked accusations of Russian sabotage, and the American Petroleum Institute published weekly inventory data. Here’s what you need to know in the financial markets on Tuesday, September 27.

1. Bond bounce before Powell’s speech

Global bond markets regained their nerve a bit overnight after Monday’s panic sell-off, but are in deep jitters ahead of the Federal Reserve Chairman’s speech, addressing a conference on digital assets at 07:30 ET (11:30 GMT).

His comments will be analyzed for any indication that the collapse in bond markets since last week’s Federal Reserve meeting has led to a change of opinion on the pace and extent of interest rate hikes, given that exchange rate appreciation and higher bond yields are already tightening the financial position. Conditions for US companies to a large extent.

There are also speeches scheduled to be given by St. Louis Fed President, Charles Evans of Chicago, and Mary Daly of San Francisco. In the data calendar, the Conference Board will release its monthly survey, while there are also data due.

2. Sterling is stable but the political damage may already be done

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The index stabilized and retreated after Monday’s disaster that forced the Bank of England to pledge not to let inflation get out of control.

This became an even more difficult challenge after huge financial endowments by the new government, overwhelmingly for high-income earners. A poll conducted after the “mini-budget” published on Friday gave the opposition Labor Party a record 17-point lead, suggesting that new Prime Minister Liz Truss and Treasury chief Kwasi Quarting may have misjudged their priorities.

The volatility will highlight more sharply than usual the BoE’s Chief Economist’s speech at 09:35 ET.

3. Stocks are ready to open with modest recoil; Appointed work in the courtroom

US stock markets are set to open higher, reversing most of Monday’s losses, but in a wait-and-see pattern for Powell’s later appearance.

By 06:20 EST, it was up 223 points, or 0.8%, while it was up 1.0%, and it was up 1.2%. All three benchmark monetary indices lost between 0.6% and 1.1% on Monday, and the Dow slid into the technical definition of a bear market.

Equities are underpinned by a better tone in bonds, with the benchmark’s yield down nearly 6 basis points to 4.25% and 3.83%, respectively. This is still a yield curve inversion which usually indicates a recession in the future.

Possibly stocks in focus later include JetBlue (NASDAQ:) and American Airlines (NASDAQ :), whose alliance is under scrutiny in court later from the federal government’s antitrust lawsuit. There is also an ongoing lawsuit between Twitter (NYSE:) and Elon Musk. Volkswagen (OTC:) ADRs are also still in focus amid reports that it will put Porsche’s IPO price at the end of its bookbuilding range.

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4. Nord Stream leaks spark more Russian accusations of dirty tricks

Prices in Europe soared again after operator Nord Stream pipelines, which run from Russia under the Baltic Sea to Germany, found no less than their separate threads within a half-dozen miles of each other.

Pipeline operator Nord Stream said the damage was “unprecedented” and added that it was “now impossible to estimate the time frame for recovery of operations”. Western analysts immediately suspected that Russia was doing the damage, making the chances of any Russian gas reaching Europe through the pipeline this winter seem very slim.

The developments raised suspicions of sabotage following previous incidents in which Russia blamed mechanical failures for cutting off its gas shipments to Germany.

5. A little oil. Eye inventory API

Crude oil prices rebounded slightly from their lows after the Nord Stream news, which revived fears that Russia may resort to extreme measures to maximize economic pressure on Europe before next winter.

By 06:30 ET, futures were up 1.9% at $78.14 a barrel, while they were down 1.9% at $84.44 a barrel.

Later, market eyes will turn to the American Petroleum Institute’s weekly report at 16:30 ET, with analysts anticipating another modest rise in crude oil inventories, which would be the fifth consecutive weekly rise if confirmed.

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