- Major U.S. equity market indices ended lower in the final trading day of August, after three consecutive days of declines driven by expectations of more aggressive rate hikes by the Federal Reserve. Each of the Dow, S&P 500, and Nasdaq ended the day down between -0.5% to -1% on Wednesday, while their monthly returns for Aug were in the red too, with Nasdaq the worst performer of the 3, down 4.6% for the month.
- The Non farm payroll report is due on Friday and is expected to show an increase in jobs by 300,000 last month after recording a 528,000 increase in July. Another strong report is likely to further cement expectations the Fed will continue with outsized rate hikes after three straight increases of 75 basis points.
- Outside of the US, Eurozone saw Inflation rising further to 9.1% in August, again overshooting street expectations. The numbers also add pressure on the ECB for a larger rate hike next week. Meanwhile Euro continues its weak trend, and is down below parity levels vs the dollar.
- Russia has confirmed intentions to stop gas supplies through the Nord Stream pipelines for 3 days of maintenance, fuelling further possibilities of a more political driven shutdown, adding further economic squeeze on the continent.
- China’s manufacturing sector continues to be in contraction mode in August, with a latest manufacturing PMI number coming in at 49.4. While the composite PMI at 51.7 was consistent with moderate expansion, still was lower than expectations.
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