GGMA Markets Briefing: Gold Slips and Stocks Stall as Markets Wait for Warsh
Markets are awaiting the day's main event: Fed Chair Kevin Warsh delivers his first Jackson Hole speech at 16:00 CET, a crucial test of a communications doctrine that has so far refused to give the market a framework (BBG) (Reuters). S&P 500 futures eased 0.12% to 7,733 and the Nasdaq contract 0.30% after the Nvidia-fuelled cash rally; gold slipped 0.57% to 4,573, and Reuters quotes ANZ warning that if Warsh offers too little clarity, that could itself be the adverse market event (Reuters) (Reuters). Futures price roughly a one-in-three chance of a September hike, with a move by December fully priced (Reuters).
In the US, the committee Fed Chair Warsh must carry argued in public on the opening evening. Kansas City's Jeff Schmid said he does not know what current policy is restricting and put himself in the dissenters' camp (BBG) (Reuters), Cleveland's Beth Hammack said now is the time to act, sees inflation ending the year around 3% and fears an inflationary mindset taking hold (CNBC), while Boston's Susan Collins calls the latest readings mixed, telling Reuters her modal scenario remains gradual disinflation under mildly restrictive policy though she is ready to hike if it stalls (Reuters), and Chicago's Austan Goolsbee wants evidence the shock is not persistent, though everybody, he says, should be on edge (BBG) (Reuters). The buy side wants a verdict too: Bloomberg reports JPMorgan's Priya Misra and Apollo's Torsten Slok urging Warsh to make inflation the unambiguous priority, Slok warning that no framework guidance risks a much bigger move in long rates (Ndtvprofit). Raghuram Rajan, who sits on one of Warsh's own task forces, told Bloomberg TV the Fed should simply raise rates (BBG). Thirty-year yields sit at 5.20% into the speech (Ndtvprofit).
Regarding the ECB, the July account described the hold twice as merely a pause and said another hike would likely be necessary unless the inflation outlook improved significantly, and Reuters sources say the Council is ready to go to 2.50% on 9-10 September (Reuters). Latvia's Martins Kazaks told TV3 that inflation must not be allowed to take root and called a September move a considerable possibility, with Morgan Stanley forecasting euro-area inflation at 3.3% next week, per Bloomberg (BBG). And Bulgaria's Dimitar Radev told Econostream that vigilance should outweigh patience after September, with October and December both live, adding that waiting for second-round effects to become fully visible could mean acting too late (Econostream-media).
In Japan, the September rate hike case hardened again. Tokyo core CPI accelerated a third month to 1.8% with the ex-energy gauge at 2.0%, exactly on consensus, and the jobless rate fell to 2.4% (JapanTimes) (LS).
A two-year JGB auction drew the weakest demand since September with the widest tail since 2016, Bloomberg reports, as investors demand clearer communication before a hike that swaps put at 84% for next month (BBG). Ten-year JGB yields rose 2.6 basis points to 2.93%, approaching the 3% milestone, and the yen slipped 0.09% to 159.53 (BBG). Prime Minister Sanae Takaichi told the Yomiuri she will cap new bond issuance around forty trillion yen and restore the food consumption-tax rate after exactly two years, a fiscal anchor offered to a nervous JGB market (Co). Finance Minister Satsuki Katayama confirmed she will attend next week's G20 in Asheville, where markets are watching for a follow-up with Bessent on the joint intervention, whose statement, she said, still lives (Investing).
Currently, STIR traders price 9 basis points of tightening for the September Fed meeting, a 34% probability of a rate rise, and 27 basis points cumulatively by December. For the ECB, they price 24 basis points for September, a 95% probability, and 44 basis points cumulatively by December. For the BoJ, they price 21 basis points for September, an 84% probability, and 40 basis points cumulatively by December. For the RBA, they price 12 basis points for September, a 48% probability, and 27 basis points cumulatively by December. New Zealand's decision lands next week with 23 basis points priced, a 93% probability.
Regarding oil, Reuters reports the war diplomacy has pivoted to reopening Hormuz, with Iran agreeing to draw up a list of conditions after Qatar's prime minister pressed Tehran on freedom of navigation (Reuters), and security council secretary Mohsen Rezaei says the US must take practical steps first (Com). But a WSJ exclusive says the Trump administration has told mediators it has no interest in returning to the June memorandum, leaving no agreed framework for the talks the market has been pricing, and another Kuwaiti tanker was hit off Oman on Tuesday (WSJ). The White House confirmed no talks are happening, and crude bounced on it before easing again overnight, WTI down 0.42% at 83.18 this morning and heading for a heavy weekly fall (CNBC) (Reuters). CENTCOM's Admiral Brad Cooper declared the shipping lanes mine-free while allies privately doubt it (BBG), Goldman Sachs estimates Gulf exports have recovered to two-thirds of pre-war levels on dark crossings and ship-to-ship transfers (BBG), and traders put Hormuz transit at half the old run-rate and rising (BBG). US crude inventories rose far less than expected last week while distillate stocks fell to 14% below their five-year average, the scarcity now in fuels rather than crude (WSJ). Bloomberg sources say Venezuela is weighing an OPEC exit as Washington discusses taking a stake in its oil fields, one option a 100-year lease (BBG). It would be the second potential departure this year after the UAE, and a fresh crack in the cartel's cohesion.
In geopolitics and trade, Politico reports the administration is weighing sweeping semiconductor tariffs that could extend to servers and laptops, with the industry warning it would kneecap the AI buildout (Politico). Canada's chief economists told Finance Minister François-Philippe Champagne the trade-war damage is manageable, bolstering Mark Carney's case for walking away, with second-quarter GDP due at 14:30 CET expected to show a 3.4% annualised rebound (BBG). In France, seven presidential candidates clashed on the economy at the Medef debate, Marine Le Pen promising a 125 billion euro cost-cutting plan and Jean-Luc Mélenchon defending debt cancellation, an idea Edouard Philippe called dangerous (Euronews).
In stocks, the ASX rebounded 0.55% to 9,037 after three days of rate-repricing losses (LS), while Chinese onshore shares eased 0.18% and the EM gauge 0.25% as Korea corrected from its AI-led run (Reuters). European futures firmed, the Euro Stoxx 50 up 0.30% at 6,453, with the ECB's path now the market's least uncertain (Reuters).
In currencies, the dollar index was steady at 99.20 into the speech (Reuters). The Australian dollar held at 0.7195 near its three-month high, on course per Reuters for a ninth straight weekly gain (Reuters), and the won extended its post-hike strength, up 0.46% (Reuters).
In commodities, gold's slip to 4,573 came with silver and platinum also easing, StoneX arguing the case for a hawkish Warsh is greater than the case against, which could extend the dip before buyers who missed the first leg return (Reuters). Copper was flat at 510, and Bitcoin eased 0.48% to 79,723 after testing the round number overnight (LS).
Data and the day ahead: Tokyo's CPI trio printed as mentioned already exactly on consensus with the core at 1.8% and the ex-energy measure at 2.0%, Japan's jobless rate beat at 2.4% (JapanTimes) (LS), New Zealand consumer confidence eased to 98.0, with two-year-ahead inflation expectations still at 4.7% a week before the RBNZ decides (Roymorgan), and the Lloyds barometer put UK business confidence at 53, its highest since the war began, with price expectations a notch lower (LS). Still to come: the Swiss KOF at 09:00 CET, German unemployment at 09:55 CET, euro-area confidence at 11:00 CET, Canadian GDP at 14:30 CET, then the main event: Fed Chair Warsh at 16:00 CET, flanked by Hammack on Bloomberg TV at 15:00 CET, the preliminary benchmark payrolls revision and final Michigan survey at 16:00 CET, the Kansas City Fed services index at 17:00 CET, Isabel Schnabel at Jackson Hole at 17:55 CET and Austan Goolsbee on CNBC at 18:40 CET (LS).
Time Stamp: 28-08-2026, 07:50 CET