Market News

IC – Europe Fundamental Forecast | 27 August 2026

What happened in the Asia session?

The Asia session was relatively cautious, with JPY and KRW the most directly affected currencies following more hawkish signals from the BOJ and BOK. At the same time, Nvidia’s exceptionally strong earnings provided a significant boost to Asian technology stocks and broader risk sentiment. The dollar remained supported by sticky U.S. inflation, but traders were reluctant to make major moves ahead of Kevin Warsh’s Jackson Hole remarks.

What does it mean for the Europe & US sessions?

Traders should expect a potentially cautious start to the European and U.S. sessions, with USD strength, U.S. jobless claims and Jackson Hole expectations likely to dominate…

ECB's Governing Council member Dimitar Radev said both the October and December meetings remain open for further interest rate adjustments, as policymakers should not wait for confirmation of second-round inflation effects before acting.

Radev warned that delaying action until wage and broader price pressures are fully visible could leave the ECB behind the curve. He also noted that 2.5% could be around the neutral interest rate level. However, he stressed that monetary policy decisions must remain guided by incoming economic data.

He also said that the ECB’s updated staff projections in September are expected to show subdued inflation and growth in the near term. He added that policymakers must also account for tighter financial conditions…

The report says that the Trump administration is weighing up a new round of "sweeping tariffs on semiconductors". Adding that up for consideration is an approach to expand the number of tech products that will be subject to duties, thus hitting hard at chips and even servers that fill data centers. In that regard, it's arguably going to be a big blow to AI development and progress in the US.

According to the sources, US commerce secretary Lutnick is wanting to favour a system in which foreign companies may be able to seek relief from said duties depending on their involvement and investment in helping to bolster domestic chip manufacturing production in the US.

The sources also claim that the administration is starting to mull a phase-in…

FUNDAMENTAL OVERVIEW

The strong bullish momentum in gold has waned recently, likely due to some profit-taking ahead of the Jackson Hole event. After the Treasury buyback announcement and Bessent’s “verbal” intervention to suppress long-term yields, traders will be eager to see whether Fed Chair Warsh leans against the easing in financial conditions.

If he doesn’t, gold will likely get another boost from further easing in financial conditions and the dovish repricing in near-term interest rate expectations. On the other hand, if he pushes back saying things like "recent easing in financial conditions, if sustained, could complicate the process of returning inflation to our…

US Markets Lower After Inflation Update – Dow down 0.2%

US stocks drifted lower in trading yesterday as investors digested Nvidia’s latest earnings results alongside a stronger inflation reading that lifted expectations of a potential Fed rate hike in September. The Dow Jones fell 0.21% to 53,463, while the S&P 500 slipped just 0.02% to 7,675 and the Nasdaq eased 0.08% to 26,130.

The inflation data pushed Treasury yields higher, with the 2-year yield rising 3.1 basis points to 4.209% and the 10-year yield adding 1.8 basis points to 4.647%. The move in yields also supported the US dollar, with the USD Index gaining 0.24% to 99.15 as traders continued to reassess the outlook for Fed policy.

Oil prices moved lower as markets…

FUNDAMENTAL OVERVIEW

USD:

The US dollar strengthened across the board yesterday after the US PCE data. The reaction was honestly odd because literally nothing has changed. The Core figures were in line with forecasts and the market pricing held steady, with 35% chance of a rate hike in September. Therefore, I would dismiss it as just noise.

Looking ahead, the key events will be Fed Chair Warsh’s speech at the Jackson Hole Symposium tomorrow, a potential US-Iran deal in the coming days and the US CPI report on September 11.

After the Treasury buyback announcement and Bessent’s “verbal” intervention to suppress long-term yields, traders will be eager to see whether Fed Chair…