US Futures Subdued | Investors Keep Their Focus on Geopolitics And Jackson Hole
US futures are trading lower following investor sentiment over in Europe which is somewhat subdued and it has some
negative skew. The reason is very simple both the US and South Korea have their military exercises scheduled this week
and it could prompt some reaction from North Korea which is going to aggravate the entire situation once again.
The resignation of Steve Bannon, the chief strategist for Donald Trump, did provide some comfort for the market on
Friday. Gary Cohn, the chief economist, is the most powerful person in the White House now, and there was some
uncertainty about him leaving the office prior to this which would have been a big blow for the president. However, with
Steve Bannon no longer in the office, it is more than likely that Gary Cohen will finally be able to get some work done.
Traders have their hopes pinned on the upcoming Jackson Hole meeting. They are expecting new information from the ECB
president and Federal Reserve chairwoman. This increases the chances of disappointment because so far one thing is clear
that the Fed is not going to be excessively hawkish and the European Central Bank is highly likely to stay reticent
during the event.
The surprise announcement during this event matters the most. We know that the Fed's discussion is more likely to be
focused on the financial stability. Draghi has already made his position very clear that he is not revealing any new
details which would impact their decision.
The British pound could feel more punishment as the Brexit negotiations will take the spotlights. The government will
release its new papers on Brexit. Investors seek clarity when it comes to Brexit and the politicians are creating
covering this with sand and keeping things in the dark. The period of transition is very important and the government
has failed to establish anything meaningful on it.