The global investors await the upcoming Jackson Hole Summit.
The central bankers of major global economies and policy experts meet in this annual symposium to look into future discuss regarding policies for the remainder of the year.
Asian markets were higher on Tuesday, with investors remaining idle ahead of the summit. In Australia, the S&P/ASX200 finished 0.42% higher, after BHP Billiton announced it would be tripling its final dividend of the year. Japan’s Nikkei struggled however, dropping 0.05% as the yen strengthened against the U.S. dollar.
European markets turned higher for the first time in four sessions, finishing Tuesday with strong gains. Germany’s DAX rose 1.35%, despite the ZEW economic sentiment survey in Germany resulting at ten-month lows. London’s FTSE was higher as well, finding support after BHP Billiton said it was selling its onshore U.S. oil and gas operations.
U.S. markets also made significant gains as risk appetite returned following reports that the Trump administration is progressing on tax reform plans. Tech shares led the rally, helping NASDAQ to rebound from recent decline, while the Dow had its best daily percentage gain in four months. In S&P 500, ten of the eleven sectors finished positively, with many sectors making more than 1%.
The pair remained within the 1.1700 to 1.1800 trading range, which it couldn’t break out of for 12 sessions. With both Fed chair Janet Yellen and ECB president Mario Draghi speaking on Friday at Jackson Hole summit, the range will likely remain until then, but remarks from the two could lead to a break in either direction.
Traders expecting the U.S. Energy Information Administration to report an eighth consecutive weekly decline in U.S. crude inventory levels bid crude higher on Tuesday. This is despite the fact that U.S. production figures remain elevated, which could easily cause another selloff in crude. There were also media reports that OPEC compliance in regards to production cuts fell from 98% in June to 94% in July.
By Adrienne Murphy —— Chief Market Analyst, Avatrade