Markets pause ahead of important speech on Thursday from Fed chairman

“Equities saw limited movement on Wednesday as investors took stock of events and paused ahead of a speech on Thursday by Federal Reserve chairman Jerome Powell,” says Russ Mould, Investment Director at AJ Bell.

“The market is eager for guidance on how the Fed might push inflation higher and what that means for monetary policy going forward.

“Powell may well say the Fed will keep its policy as accommodative as possible until inflation and employment has strengthened. Equities are unlikely to move too much until the speech is made, but afterwards we could see a sharp increase in trading activity on the markets as investors get a clearer picture of the Fed’s intentions.

“Ahead of that event, the FTSE 100 dipped 0.4% to 6,010 with strength in energy, miners and financials more than offset by weakness in industrials, consumer non-cyclicals, utilities and healthcare.

“Oil prices pushed ahead 0.1% to $46 per barrel as many US producers halted output as Hurricane Laura headed towards the Gulf Coast.

“In mainland Europe, the DAX index nudged up 0.3% after German coalition parties agreed to extend coronavirus relief measures.”

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