Markets: Relief rally stalls ahead of Jackson Hole - TDS

According to analysts at TD Securities, the market continues to digest a mix of political noise and skittish price action.

Key Quotes

“The Fed minutes were a non-event and the majors are still sorting through the implications of the Cohen/Manafort developments.”

“The Fed looks poised to hike in Sep, though discussions on the balance sheet and yield curve should feature more prominently over the coming months.”

“Going into JH no news is good news for USD, leaving EURUSD capped at 1.16.”

“Besides JH, the other major risk is how Trump handles the fallout of the recent developments. US/China trade negotiations feature high on the event calendar, leaving risk appetite at the whim of Trump's reaction to the news cycle. It's unlikely that either side stands down yet, increasing the fallout for AUDUSD that should mark new lows.”

“The political situation in AUD amplifies the macro risks, as markets mull the prospects of a rating downgrade on a shift in government.”

“We continue to target a move to 1.0850 in AUDNZD and would look to take profit on the AUDJPY put spread floated last month.”