Bitget CFD chief analyst Lewis Huang said in a livestream that this week’s U.S. Personal Consumption Expenditures, or PCE, data and the Jackson Hole symposium are the main points of focus for markets. He said investors are looking beyond whether the Federal Reserve changes rates and are also watching how officials address inflation that remains above the 2% target, elevated long-term Treasury yields and fiscal pressure. According to Huang, if core PCE comes in above expectations and the Fed signals that it will keep policy tight or continue to stress fighting inflation, U.S. Treasury yields and the dollar could find support, while rate-sensitive assets such as gold and the Nasdaq 100 may come under pressure. If inflation cools and officials leave room for policy flexibility, markets may start pricing in future easing again, which could support gold, non-dollar currencies and growth-oriented equity indexes. Huang added that the latest PCE reading was broadly in line with expectations, shifting attention toward the Jackson Hole gathering. He also said Middle East tensions and risks around the Strait of Hormuz could still lift oil prices and inflation expectations, and advised traders to watch the interaction among the dollar index, 2-year and 10-year Treasury yields, gold and crude oil after major data releases.
Bitget CFD chief analyst Lewis Huang said in a livestream that this week’s U.S. Personal Consumption Expenditures, or PCE, data and the Jackson Hole global central banking conference are the main focus for markets.
Huang said investors are not only watching whether the Federal Reserve changes interest rates. They are also looking at how the central bank responds to inflation that remains above its 2% target, elevated long-term Treasury yields and fiscal pressure.
Core PCE and Fed messaging are the near-term variables
According to Huang, if core PCE comes in above expectations and the Fed signals that it will keep policy tight or continues to stress its inflation fight, U.S. Treasury yields and the dollar could gain support. Gold and rate-sensitive assets such as the Nasdaq 100 could face pressure.
If inflation cools and officials sound more inclined to preserve policy flexibility, markets may start trading future easing room again. In that case, gold, non-dollar currencies and growth-oriented equity indexes could benefit.
Attention shifts to Jackson Hole after PCE meets expectations
Huang added that the latest PCE data was broadly in line with expectations, and market attention has now shifted to the Jackson Hole global central banking conference.
He also said tensions in the Middle East and risks around the Strait of Hormuz could still push up oil prices and inflation expectations.
Watch the dollar, Treasury yields, gold and crude oil together
On positioning, Huang said traders should focus on the interaction among the U.S. dollar index, U.S. 2-year and 10-year Treasury yields, gold and crude oil. After major data releases, he said, it is better to wait for the market to confirm direction rather than chase the first move with high leverage.
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