Sterling (GBP) Forecast: Will Jackson Hole Prove to be a Catalyst or Snoozefest?
GBP News and Analysis:
- Jackson Hole: Potential catalyst or will it prove to be underwhelming for markets?
- Brexit teething problems persist as job vacancies in the transport sector continue to cause supply chain delays
- UK Covid cases rise
Spotlight on Jackson Hole and Tapering Timelines
In the absence of any significant event risk out of the UK apart from PMI data, we turn our focus to the US where there has been a substantial build-up to this year’s Jackson Hole Economic Symposium, which will be held virtually once again in light of the continuing pandemic.
Market participants waited eagerly to find out if the Fed committee believed the labor market has made ‘substantial progress’ towards the Fed’s goals and ultimately communicate the date when stimulatory asset purchases can be slowed down.
However, the Fed reiterated its focus on data as Powell elected to stick to the narrative that has been communicated thus far – inflation is transitory and more needs to be seen from the labor market. The main set of employment data, in the form of non-farm payrolls (NFP) is due next Friday and will provide a better idea of any further labor market progress. Therefore, specifics on tapering developments will have to wait for the September FOMC meeting, or even later.
Next Week’s Economic data
For all market-moving data releases and events see the DailyFX Economic Calendar
GBP/USD shows no real directional bias as the ‘wait and see’ approach gripped most major pairings ahead of Jerome Powell’s appearance at Friday’s Jackson Hole event.
Chart prepared by Richard Snow, IG
Job Vacancies in the Transport Sector Continue to Cause Supply Chain Delays
Retailers, restaurants and those in the fast moving consumer goods (FMCG) industries have been experiencing delays on new orders due to a UK-wide shortage of lorry drivers. The main reasons cited for the significant drop in drivers are: European drivers going home during the pandemic and not returning, unsuitable working conditions and pay, increased Brexit-related delays and costs, retirements and a lack of young people in the industry. The economic impact of the shortages will weigh on the Pound with many raising additional concerns about transport capacity as we get closer to the Christmas shopping period.
The Delta variant continues to spread throughout the UK as residents enjoy life post hard lockdown. Rising concerns may lead to reimposing restrictions and the UK government will monitor the situation.
UK: New Covid Cases
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX