IBEX 35, Euro Stoxx 50, Jackson Hole, Eurozone, Federal Reserve – Talking Points
- IBEX 35, Euro Stoxx 50 points higher due to narrowing fear
- The Delta option remains unbridled, with Spain continuing to report higher incidents
- Jackson Hole is central, with markets eagerly awaiting policy comments
European equities ended Tuesday’s session at a lower level as major continental indices appear to be recovering after the worst week in February. At the end of the week, market participants will gradually move towards the Fedi Jackson Hole Economic Policy Symposium, with many looking for clarity on the central bank’s narrow timeline. Headlines continue to be dominated by geopolitical tensions, Beijing’s continued crackdown on technology companies, and persistent concerns about the proliferation of the Delta variant. Although the path of least resistance is likely to remain inclined, the aforementioned headwind may rise backwards a new attempt to retest recent records.
The setback of the IBEX 35 index will remain intact after strong sales in June and July. In the event of a rapid decline, the index fell from a high level of 9310 after COVID to test its 200-day moving average below 8400. The rise in the index reflects the recovery of the domestic economy, which has benefited from an influx of vaccinated tourists. Despite fears about the Delta variant, Spain has vaccinated more than 66% of its population. Should Spain rejuvenate its feelings about its vaccination program, the IBEX 35 index could move to its highest level in June (9,310). Once the index has confirmed the closure above the 50-day moving average, the charts may move higher.
Daily schedule of the IBEX 35 index
The Euro Stoxx 50 index may show a new step higher last Friday in testing and rebounding the 50-day moving average. The index appears to be benefiting from a possible delay in the Federal Reserve’s tightening schedule, as continued central bank stimulus represents a significant setback for risk assets. Although the Fed had fears surrounding a possible austerity in the fall of 2021, it did these fears appear to have been significantly alleviated.
Robert Kaplan, The president of the Federation’s Dallas branch and a remarkable hawk, talked about how the Delta variant potentially narrowed him down. This seemed to have missed most policy observers. The prevailing mood in the near future is probably due to the events and comments that will appear at the virtual Jackson Hole symposium. In the absence of sudden surprises for policy makers in their comments, risk assets, including Euro Stoxx 50, may continue to be higher.
Daily schedule of the Euro Stoxx 50 index
As is feared worldwide, euro area economies may be showing signs of slowing down. This is likely to test the rise in regional equities in the near future. The Eurozone Fast Composites Managers’ Index (PMI) was 59.5, compared with 60.2 in July. While a reading above 50 indicates growing economic activity in the manufacturing and services sectors, the decline over the months may cause investors’ minds to fear “top growth” again. The eurozone can then follow the steps of China and the United States in announcing a slowdown, making it even more difficult to reduce the projections for global enlargement.
Euro area economic calendar
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