By eFXdata — Aug 24 - 01:30 PM
Societe Generale Research discusses its expectations for Fed's Powell's virtual Jackson Hole opener on Thursday.
"Poor Eurozone PMI data were ignored on Friday and the deterioration relative to the US likewise. The market gets another bite at the cherry with IFO tomorrow (will it be less gloomy?) but mostly, we're waiting for Jay Powell's virtual Jackson Hole opener on Thursday. The Fed is dovish by any measure, trying only to find the best way to signal that. Yield curve control has proponents but not a majority, negative rates are unpopular, and while a weaker dollar would suit the Fed, they don't like talking about it," SocGen notes.
"The danger at this point is, that the market is too heavily biased in favour of a degree of dovishness even Jay Powell can't deliver (yet). If that's the case, the long-term dollar decline will remain a theme of the next few years, not just months, but the need for a correction will be increasingly clear," SocGen adds.
Société Générale Research/Market Commentary