By Geoffrey Smith and Ana Beatriz Bartolo
Investing.com – US GDP and jobless claims data will refresh the backdrop for Fed Chairman Jerome Powell’s speech in Jackson Hole on Friday. Political appeasement essay inserts the Brazilian market in the good external mood of the week.
South Korea raises interest rates, the first major Asian country to do so since the pandemic began. Stocks are calm awaiting the Fed, while the SEC is chasing the ESG industry and commodities have taken a fresh scare on Chinese growth.
Here’s what you need to know about the financial markets on Thursday, August 26th.
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1. GDP, jobless claims and price data set the stage for Powell
The US economic data takes on special significance today, renewing the backdrop for Friday’s long-awaited speech at the Federal Reserve symposium in .
The first revision of data for the second quarter will be released at 9:30 am and, although it is largely retroactive, some of its subcomponents will still be of interest – notably (PCE), which is the Fed’s preferred measure. to the .
Oil prices increased 6.1% in the year to the second quarter, according to the government’s first estimate. Any revision to that number could affect perceptions of Powell’s willingness to signal a gradual decline in bond purchases on Friday.
In addition to all this, there will be the (most opportune) numbers also at 9:30 am, and the regional business survey will be released at 12:00.
2. Essay on political appeasement in Brazil
The market reacted well to yesterday’s political news, with a strong recovery and a sharp drop in the dollar. The movement is driven by signs of appeasement of the political crisis. The president of the Senate, Rodrigo Pacheco (PSD-MG), said that he will not guide the impeachment request of the Minister of the Federal Supreme Court (STF) Alexandre de Moraes.
The action had been filed by President Jair Bolsonaro (no party), who also intended to ask for the impeachment of Minister Luís Roberto Barroso. Faced with Pacheco’s refusal to follow this path, the political wing of Bolsonaro’s government recommended that the president put aside this speech to ease the tension between the powers and avoid a greater institutional crisis.
Another scenario that favored the market yesterday was the speech of the president of the Chamber of Deputies, Arthur Lira (PP-AL), at the Expert XP event, in which he said that he will not vote on proposals that violate the spending ceiling. The discussion on the country’s fiscal conditions will continue today at the same event, at 3 pm, with the participation of the Minister of Economy, Paulo Guedes.
The day before, the Ibovespa closed up 0.5%, returning to the level of 120 thousand points, while the dollar dropped 0.66% to R$ 5.2109.
CHECK: Brazilian stock quote
3. South Korea begins to tighten monetary policy; ECB minutes
Some central banks, of course, aren’t waiting for the Fed. The Bank of South Korea has become Asia’s biggest central bank to begin tightening monetary policy after last year’s flaunting in the first stage of the pandemic.
The bank raised its from 0.5% to 0.75%, a decision that was not expected by most analysts.
The lax policy adopted last year has fueled a boom in house prices and an increase in household debt, both of which are growing at annual rates of more than 10%.
In Europe, the European Central Bank is scheduled to release its latest monetary policy meeting, but it is unlikely to spawn any fears of monetary tightening given warnings about Germany’s growth outlook in recent days. Germany’s in September plummeted, according to a GfK survey.
CHECK: Quotation of the main global indices
4. Shares must open mixed in the US; SEC and ESG
US equities are likely to open mixed later after hitting new highs on a low volume day on Wednesday. Pre-market moves are looking moderate, with investors already holding big new bets even after today’s data and Powell’s speech on Friday.
At 8:38 am, it rose 0.13%, while e had fall of 0.2% and 0.12%. The , ETF that measures the performance of Brazilian stocks in the US, operated stable.
US regulators, on the other hand, stirred up the cozy and pleasant world of ESG investing, with an investigation into allegations of whistleblowing in German group DWS (DE: ), asset manager of the Deutsche Bank (DE:) (SA:).
The Wall Street Journal reported that people familiar with the matter said the Securities and Exchange Commission is in the early stages of reviewing the former DWS sustainability chief’s allegations that the company has exaggerated its use of environmental, social, and related references. governance. DWS shares, most of which are owned by Deutsche Bank, fell sharply on the European morning.
ESG investments have been the hottest new area for institutional money managers in recent years, offering a new way to offer premium products at a time when cheaper passive investment strategies are eroding their traditional businesses. Assets managed by ESG funds have more than tripled in two years to more than $2 trillion, according to Morningstar data.
5. Oil faces difficulties after China’s latest worries
Oil prices struggled with resistance around the $70-a-barrel level, despite US government data showing steady declines and according to Labor Day, traditionally seen as the end of the summer car season, approximates.
At around 8:44 am, futures contracts fell 0.82% to US$67.69 a barrel, while falling 0.83% to US$70.68 a barrel, both benchmarks consolidating after a solid increase at the beginning of the week in response to economic data from the US and China.
CHECK: Quotation of the main global commodities
Other commodities were also in consolidating mode, with base and precious metals falling, as China signaled further steps to cool the housing sector, ending a three-day high in local equities.