The last week was pretty much solely focused on Jackson Hole- which ended up being a slightly dull affair by all measures- there was no “informal nod” that QE tapering would be beginning straight away, so it seems we now wait for the Fed meeting in September for a signal on tapering- which shouldn’t come as much of a shock to the market. Following the speech on Friday- GBPUSD rates moved up slightly to 1.3750 after being as low as 1.36 earlier on in the week- which was a welcome recovery to many I’m sure.
Now we can focus again on UK recovery- looking at signals from the BoE, we are also looking at interest rate hikes in 2022 (Providing recovery allows) and a taper of QE, which would be great for Sterling overall- we just have to keep an eye on inflation and employment numbers to ensure it makes sense and there are not long term problems coming with it.
There are no important data releases for the UK this week- so my focus is still on Covid cases, and when the booster jab is announced to begin in the UK- we are seeing from Israel that it is effective and makes sense, and definitely looks like the right move to avoid winter restrictions in the UK. This is also the last month of the furlough scheme, so I am also watching employment numbers closely to try and gauge what employment may look like in the coming months- there seems to be a lot of job openings available in the UK, and once the furlough scheme is finished, I am sure there will be plenty to fill these positions.
The only noteworthy data release this week are NFP’s which are expected lower at 750k- as always, trying to predict this data is pointless, so we will have to wait and see how this comes out to get a reading on the employment situation in the U.S