Market Data Releases Build Towards Friday's Employment Report

After a tumultuous week, the global capital markets are struggling to stabilize.  Chinese equities were under sharp downward pressure following news reports that the large-scale intervention was to end.  However, stocks roared back in late dealings, and other reports indicated that brokerages were being asked to boost their contribution to the equity market rescue fund by another CNY100 bln (~$15.7 bln).  Meanwhile, the message from Jackson Hole was the officials in US, Japan and Europe expect inflation pressures to increase.

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Rounding Up a Wild Market Week

While Asian equity markets extended yesterday's rally, a consolidative tone has emerged elsewhere.  This translates into heavier equities in Europe, including US shares that trade there, lower core bond yields, softer oil, and a dollar that has seen some of yesterday's gains pared.  Yesterday saw key retracements reached or approached.  Given the uncertainty of policy intentions, month-end considerations, and the key events next week (beginning with this weekend's Jackson Hole confab, and next week's ECB meeting and US jobs data), we anticipated a bout of consolidation even before the data.

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Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people.
Wendell Philips
He who controls the money supply of a nation controls the nation.
James A. Garfield
The moment that government appears at market, the principles of the market will be subverted.
Edmund Burke