BRICS Summit to Draw Global Attention

China's liquefied natural (LNG) gas importers are starting up or expanding trading desks in London and Singapore to better manage their growing and diversified supply portfolios in an increasingly volatile global market.

The beefed-up trading presence of Chinese importers puts them in direct competition with such global heavyweights as Shell, BP, Equinor and TotalEnergies for a market that the International Energy Agency says doubled in value to $450 billion last year.

About a dozen Chinese companies have been expanding trading teams or adding new desks, with privately run ENN Natural Gas and state-run China National Offshore Oil Corp (CNOOC) the latest to plan London offices, and utility China Gas Holdings setting up a Singapore operation, company officials and traders said.

Chinese gas importers have also boosted long-term LNG contracts with Qatar and U.S. suppliers by nearly 50% since late 2022 to more than 40 million metric tons per year (mtpy), with plans to add more volumes from those two countries, as well as from Oman, Canada and Mozambique, traders and analysts said.

"We're going to see a paradigm shift in Chinese companies from being total net importers to (being) more international and domestic trading players," said Toby Copson, Shanghai-based head of global trading for Trident LNG.

Already, state-run PetroChina, Sinopec, Sinochem Group and CNOOC are actively trading volatility to capitalise on their long portfolios, Copson said.

China vies with Japan to be the world's largest LNG importer, although it's not clear how much surplus or other volumes Chinese companies might have available to trade.

PetroChina International (PCI), trading arm of PetroChina and China's largest gas trader with a 100-strong global team in Beijing and four other international offices, imported or traded about 30 million tons of LNG last year.

Zhang Yaoyu, PCI's global head of LNG trading, declined to comment on the company's traded volume, but said trading was part of the company's overall strategy.

"Supply security is still at the heart of our business activities. Trading capability is one of the enablers ... to help us better deal with market swings," Zhang said.

By 2026, Chinese companies are expected to have contracted LNG supplies of more than 100 million tons a year. That could mean a surplus of up to 8 million tons that year, according to consultancy Poten & Partners, or a deficit of 5 million to 6 million tons based on estimates from pricing agency ICIS.

Either way, China's growing domestic output and more piped gas from Central Asia and Russia provide enough of a fuel base that Chinese gas companies can trade or swap U.S. and other portfolio cargoes when arbitrages open or it makes market sense.

"I could see China becoming a seasonal seller to places like Southeast Asia, South Korea and Japan, as well as into Europe," said Jason Feer, head of business intelligence at Poten & Partners.

U.S. LNG contracts are done on a free-on-board (FOB), open basis with no restrictions on destination, and consultant Rystad Energy estimates U.S. volume will make up a quarter of China's long-term contracts by 2030.

Qatar, which will be China's largest supplier for 2026, however, offers traditional LNG contracts that are restricted to a single destination or country.

Russia's invasion of Ukraine last year forced European buyers to raise LNG imports by two-thirds to replace lost Russian piped gas. This created an outlet for companies with available supplies, and Chinese, Japanese and South Korean companies pounced as global LNG prices surged and the value of the market doubled.

European users have also been reluctant to sign long-term contracts because of decarbonisation goals, and Asian gas traders and importers have been sending LNG to Europe during spring and summer to fill storage tanks there, Feer said.

PCI as well signed a deal in May to use Rotterdam's Gate regasification terminal for 20 years, a first for a Chinese company in Europe.

These openings in the market and a more liberalised domestic gas market have also prompted smaller Chinese gas distributors and importers to expand into the trading space.

China Gas Holdings, for instance, which has signed contracts for 3.7 million tons per year for U.S. LNG, is hiring its first two traders for a new office in Singapore and is looking to secure more contracts, a company executive told Reuters.

It joins ENN, Beijing Gas, Zhejiang Energy and JOVO Energy in establishing a trading presence in the Southeast Asian energy hub.

"Compared to Japanese firms, Chinese are way more aggressive in expansion, with PCI and Unipec among the best payers offering comparable packages as the global majors," as they look to fill out trading desks, said a Singapore-based recruiter.

It's summer camp season and not to be left out, U.S. rate setters and overseas pals gather in Jackson Hole, Wyoming, to talk central banking.

The so-called BRICS grouping gathers too amid increasing disquiet in some big emerging markets, while business activity data globally and China property woes mean August is proving far from dull.

Here's a look at the week ahead in markets from Ira Iosebashvili in New York, Li Gu in Shanghai, Yoruk Bahceli in Amsterdam, Jorgelina do Rosario and Marc Jones in London and Rachel Savage in Johannesburg.

U.S. Federal Reserve officials (plus friends from the ECB, BoE and BOJ) descend on Jackson Hole, Wyoming on Aug. 24-26 for their annual central bank confab.

A year ago, uncertainty swirled around how high the Fed would raise rates and whether aggressive tightening could defeat inflation without triggering recession.

Investors are more sanguine today, as expectations grow for a Goldilocks scenario of resilient growth and cooling price pressures.

That doesn't mean central banks are off the hook. Inflation remains sticky in places and investors want to know how long it will take for central banks to switch to easing. Bonds yields are rising again, threatening to dent stocks.

And on Wednesday, the spotlight turns to results from chip-maker Nvidia, whose stock is up almost 200% this year in-part on AI excitement.

Fresh strain in China's property market exacerbates the sense of crisis building in the world's No.2 economy.

The onus is on authorities to do more after an emergency rate cut last week failed to shore up sentiment. On Monday, China cut its one-year benchmark lending rate in a bid to boost credit demand.

Other measures investors are pining for include a relaxation of home-buying restrictions in cities such as Beijing and Shanghai.

Property accounts for roughly a quarter of the economy and news that new home prices fell for the first time this year in July is worrying.

Country Garden, once China's largest developer by sales, is teetering near default; a major Chinese trust company has failed to make payments on financial products following wrong-way property bets and embattled developer China Evergrande has filed for bankruptcy protection in the United States. Peak China pessimism, it appears, has not been reached yet.

Wednesday's August flash PMI business activity indicator, released across a host of economies, could throw cold water over optimism about resilient global growth and help traders get a sense of how long rates will stay high.

In July, a services sector slowdown pushed U.S. business activity to a five-month low; overall activity in the euro area contracted for the second-straight month.

Earlier in 2023, the services sector had supported economic growth across developed economies even as manufacturing slumped.

Input and output prices will also come under scrutiny as rising oil prices and strong labour markets suggest inflation is not contained yet.

European PMIs could provide a bigger signal on whether the European Central Bank will hike again in September and if the Bank of England opts for a big rate increase.

Leaders of the 'BRICS' - Brazil, Russia, India, China and South Africa - meet Tuesday-Thursday in Johannesburg as they bid to turn the loose bloc into a global counterweight to the West.

Expansion is expected to be high on the agenda - some 40 nations have expressed interest in joining, either formally or informally, according to host South Africa. These include Saudi Arabia, Argentina and Egypt.

Not everyone is keen though, including Brazil, which is concerned its influence could be diluted. And Vladimir Putin, who will be videocalling in due to his international arrest warrant, has a headache back at home as a slumping rouble fuels speculation of tough new capital controls being introduced.

Turkey's central bank is poised to raise rates on Thursday for the third time in a row since Hafize Gaye Erkan was appointed as governor in early June.

The question is how big the hike will be as Turkey battles double-digit inflation. A policy U-turn at the last two meetings delivered rate increases that fell short of investors' expectations.

While the key rate stands at 17.5%, the consumer prices index leapt to a 25-year high above 85% last year and is expected to rise again to peak above 60% in 2024.

Erkan vowed in July to continue with "gradual and steady rate hikes" after years of President Tayyip Erdogan pushing for lower rates.

A big increase is unlikely to faze emerging market investors. Russia just jacked up its rates by 3.5 percentage points, and Argentina, a whopping 21 percentage points.

It has been a quiet start to the week for FX markets. Chinese authorities have delivered another rate cut – but this time the one-year loan prime rate has been lowered 10bp to 3.45%, while the 5-year loan prime rate has been unexpectedly left unchanged. The latter rate is seen as more important to Chinese mortgage markets and raises questions about how China plans to stimulate demand in that sector. The rate cut did not see large moves in the renminbi, and the ongoing low USD/CNY fixings suggest Chinese authorities are trying to draw some kind of line in the sand near 7.35. Unlike the Japanese, who are very transparent with their FX intervention activities, it is hard to discern whether Chinese authorities are intervening to sell dollars near current levels. However, with China employing monetary stimulus, expect the renminbi to stay soft and remain a popular funding currency.

The dollar looks set to hold onto its gains this week. In focus will be Friday's speech from Fed Chair Jay Powell at the Jackson Hole symposium. This comes at a time when US 10-year yields are closing in on 4.30%, and our rates strategy team favours 4.50%. Intriguingly, the team notes that the US 10-year yield correlates most with the pricing of the policy rate four or five years forward. In other words, the Treasury sell-off is less about the terminal rate for this tightening cycle and more about where the Fed Funds rate settles under more normal conditions. Chair Powell could shed some light on this on Friday. The bottom line, however, is that it looks too early for the Fed to sound the all-clear on inflation and the dollar probably holds its gains.

DXY is holding gains above the 100-day moving average at 103.20 and can probably edge up to 104.00 this week.

Additionally, this week, look out for headlines from the BRICS summit (taking place August 22-24) in South Africa. The topic of BRICS expansion tops the agenda and inevitably will raise questions over the threat of de-dollarisation.

Before ECB President Christine Lagarde's speech on Friday, the highlight in the eurozone this week will be Wednesday's release of flash PMIs for August. Currently, gloom is descending on the European outlook, including the re-introduction of Germany's description as the 'sick man of Europe'. Let's see whether the manufacturing PMIs deteriorate any further and also whether services PMIs cross decidedly into sub-50 territory.

EUR/USD is starting to look quite comfortable below 1.09 and below support at 1.0835/45 could make a dip down to the 1.0775 area. Certainly, with US Treasury yields pushing ahead and proving a threat to risk assets – and China still fragile – EUR/USD will struggle to make it back above the 100-day moving average at 1.0930.

The Bank of England's trade-weighted sterling index continues to trade near the highs of the year, no doubt propped up by high short-term interest rates. 3m GBP implied yields of 5.40% make it very expensive to FX hedge positions on UK bond markets, for example.

It may well be that this sterling strength endures to the next set of releases on UK wages and CPI (September 12th and 20th respectively), with more mileage to be had against the euro than the dollar given headwinds to the external investment environment.

For this week, the UK calendar is light until Wednesday's release of PMI data. EUR/GBP can stay offered in a 0.8500-0.8550 range, while GBP/USD remains trapped well inside last week's narrow range of 1.2615-1.2785.

This week, we will see a number of hard data from the Polish economy. Industrial production, PPI and wage numbers will be released today. Our economists expect another 0.5% year-on-year decline in industrial production – better than market expectations. However, the slowdown in China and the weak performance of German industry shows the risk of another weak result for Polish industry. On the other hand, wage growth should confirm steady double-digit growth. Tomorrow, Poland will remain the main focus with the release of retail sales and construction data. Thursday will see consumer confidence data in the Czech Republic, which could show further improvement thanks to a rapid slowdown in inflation.

On the sovereign rating side, Fitch will publish a review of the Czech Republic on Friday. The agency downgraded the outlook to negative from AA- stable in May last year, mainly due to the deteriorating fiscal policy trajectory. However, the negative scenario has not materialised since then, and the government has unveiled a large consolidation package resulting in a rough halving of the public deficit next year. We therefore expect the outlook to return to stable.

In the FX market, CEE currencies have gained some ground in the past week after some time despite the fact that US dollar levels are not making the region's life easier. In our view, the gains were mainly driven by rising market interest rates and support from the interest rate differential. Moreover, after weeks of weakness, more balanced positioning across the region is also helpful. Interest rates drivers seem to be back after a long time, and Friday's move indicates further gains for today. The Polish zloty seems most tempting from this perspective, almost touching 4.50 EUR/PLN last week, which we believe is the upper ceiling of the current 4.40-4.50 range. Unless today's data surprises on the negative side, we could see further gains below 4.44 EUR/PLN. The Czech koruna should finally settle below 24.00 EUR/CZK.

The global natural gas market should get more clarity around potential strike action at Australian LNG facilities this week. Over the weekend, workers at Woodside said they will give the company until the end of Wednesday to come to a deal - otherwise they will call industrial action. Workers said that they would give 7 working days notice if strike action is to be taken. Woodside's North West Shelf (NWS) facilities have a capacity of around 16.7mtpa, equivalent to a little over 4% of global supply. We should also get more clarity on what workers at Chevron's Gorgon and Wheatstone facilities decide by 24 August. These two facilities have a combined capacity of 24.5mtpa. Given that European gas storage is now around 91% full, we believe any strength in prices should be short-lived. We would need to see a large amount of the at-risk capacity (41.2mtpa) offline for a prolonged period in order to lead to a significant change in European fundamentals, at least over the next month or two.

Chinese trade data released last week shows that LNG imports in July totalled 5.86mt, down from 5.96mt the previous month, although, still up 24.3% YoY. This leaves cumulative LNG imports at 39.24mt, up 9.3% YoY. These stronger YoY flows are to be expected, given the impact of covid-related lockdowns last year. It is important to point out that cumulative imports are still down more than 13% from 2021 levels.

Trade data also showed that Chinese diesel exports grew significantly, with 910kt exported over July, up from 290kt in June and a 153% increase YoY. This leaves cumulative exports at 8.4mt - an almost 250% increase YoY. Stronger run rates and larger export quotas have supported these stronger flows, whilst a strong global middle distillate market more recently will also be supportive of these flows.

The latest rig data from Baker Hughes shows that the number of active oil rigs in the U.S. fell by 5 over the week to 520 - the lowest level since March last year. The U.S. has lost 107 oil rigs since early December and it is not too surprising that this reduced drilling activity means that oil production growth forecasts for later this year and through 2024 are looking relatively modest. Primary Vision's frac spread count shows that it is not just drilling activity which is falling - U.S. completion activity is also trending lower, with the frac spread count falling by 6 over the last week to 256.

The latest positioning data shows that speculators increased their net long in ICE Brent by 19,748 lots to 230,735 lots. This is despite oil prices edging lower over the reporting period. The move was driven by fresh longs, suggesting that some speculators took advantage of more recent price weakness to enter the market from the long side. Positioning data for NYMEX WTI shows that speculators liquidated longs over the week, with the net long declining by 31,338 lots to 178,820 lots. Finally, speculators remain constructive towards middle distillates, increasing their net long in ICE gasoil by 5,703 lots to 93,941 lots - the largest position since March 2022. The market appears to be concerned about the fact that ARA gasoil inventories are still looking quite tight and we are yet to start seeing a build in inventories as we edge closer towards the start of winter.

The gold market remains under pressure, with spot prices now trading below US$1,900/oz. The realisation that we are unlikely to see the Fed start cutting rates this year has weighed on gold. In fact, recent U.S. macro data suggests that there is still the possibility that the Fed may have more work to do when it comes to monetary tightening. We could see some volatility later this week in gold prices with Jerome Powell set to talk at Jackson Hole on Friday, possibly providing some insight on Fed policy for the remainder of the year. Higher rates have seen 10 year real yields hit their highest levels since 2009 recently, and they continue to edge closer towards 2%. The stronger rate environment combined with USD strength is certainly not proving supportive for gold. ETF holdings in gold have seen 12 consecutive weeks of outflows - over this period we have seen outflows of around 4moz, leaving total ETF gold holdings at around 90moz. Speculators also reduced their net long in COMEX gold by 29,042 lots to 46,540 lots over the last reporting week.

The latest trade data from China Customs show that imports of unwrought aluminium and products rose 20% YoY to 231.5kt in July. This leaves cumulative imports over the first seven months of the year at 1.43mt, up 12.2% YoY. On the export side, alumina exports jumped by 266% YoY to 130kt last month, while YTD exports have risen by 16% YoY to 700kt. This increase is driven largely by stronger flows to Russia.

The latest CFTC data shows that money managers increased their net short in CBOT corn by 45,924 lots to 72,580 lots over the last reporting week. Improved crop conditions in the U.S. have eased some concerns over the U.S. corn crop. It is a similar story for CBOT soybeans, where speculators reduced their net long by 13,362 lots to 50,719 lots. Meanwhile, speculators increased their net short in CBOT wheat by 10,195 lots to 65,590 lots. Clearly, the market is not overly concerned about Ukrainian grain flows, with strong supply growth elsewhere this season, particularly when it comes to corn.

Recent trade numbers from China Customs show that sugar imports fell 60.5% YoY to 110kt in July, whilst cumulative imports declined 41% YoY to 1.2mt in the first seven months of the year. Earlier, 2022/23 sugar import estimates were cut, a trend that we are seeing across a number of key importers, with higher global prices seeing a number of countries drawing down domestic inventories instead.

In a major plot twist, recent reports have unveiled a peculiar trend involving Coinbase, the renowned cryptocurrency exchange. While publicly advocating for solidarity within the crypto industry against regulatory encroachment, Coinbase's own actions seem to suggest a contrasting narrative. The company's strategic maneuvers, as indicated in quarterly reports submitted to the Securities and Exchange Commission (SEC), hint at a rather unexpected strategy—betting against the very market it operates within.

Coinbase has been fervently rallying the crypto community to stand together against the perceived regulatory crackdown by authorities like the SEC. The company, however, is not immune to such regulatory pressure itself, facing its own legal challenges.

Interestingly, tucked away in the company's financial disclosures are revelations that shed light on a potential dual strategy—while urging unity against regulation on one hand, Coinbase has been discreetly hedging its bets on the market's decline through strategic short positions.

Quarterly reports, meticulously unearthed by Finbold, reveal an unexpected facet of Coinbase's activities. The company has been apparently involved in shorting the crypto market through intricate financial strategies involving derivatives.

Such short positions, traditionally adopted by investors to profit from market downturns, are executed through futures contracts or by borrowing cryptocurrencies with collateralized assets. This dual-pronged approach, albeit somewhat covert, speaks volumes about Coinbase's perceptions of the market's trajectory.

The financial figures, extracted from the quarterly reports submitted to the SEC, provide a glimpse into Coinbase's shadowy strategy. As of December 31, 2022, Coinbase held a substantial $300.15 million in potential short positions.

The distribution of these positions is intriguing: $136.23 million in shorting positions through futures contracts, $12.46 million in non-hedged shorting positions with futures contracts, $81 million in cryptocurrency asset borrowings with embedded derivatives (as a hedge), and $70.46 million in similar borrowings (not as a hedge).

As of June 30, 2023, the figures showed a shift, with $119.66 million in potential short positions. These included $187,000 in non-hedged shorting positions through futures contracts and a considerable $119.48 million in crypto asset borrowings with embedded derivatives (as a hedge).

A Twitter account named Rho Rider made a thought-provoking observation on August 16. The tweet hinted at Coinbase's not-so-public activities, highlighting that while the exchange was launching crypto futures, it had a history of shorting the market using this very tool.

This seemingly strategic use of crypto futures was positioned as a potential source of front-running investors—adding yet another layer to Coinbase's multi-faceted approach.

Coinbase's journey from a straightforward cryptocurrency exchange to a contrarian player in the market's dynamics is a testament to the complexity of the crypto ecosystem. Amidst regulatory challenges and ever-evolving market trends, the company has apparently forged a dual path—one that champions the industry's strength in unity while simultaneously positioning itself to benefit from market downturns.

This revelation brings to light the intricacies and layers of the crypto world, reminding investors and enthusiasts alike that even the most prominent players might be navigating uncharted waters in their pursuit of success.

Coinbase's recent revelation of its shorting strategy presents a paradoxical narrative that challenges the conventional wisdom surrounding the cryptocurrency industry. While its public face promotes solidarity against regulatory hurdles, its financial disclosures suggest a pragmatic approach to market dynamics.

As the crypto landscape continues to brace itself from the challenges posed by regulators and competitors in the tech sector, Coinbase's intriguing dual strategy serves as a reminder that the industry's surface may not always reflect the depths of its strategies.

As a fresh week unfolds, global markets seem to tread cautiously, keeping a close watch on the recent undertakings in Asian economies. PBoC's modest rate cut decision has catalyzed a minor pullback in stocks across China and Hong Kong. In contrast, Japan's Nikkei shows modest gains, reflecting a divergence in Asian market sentiment. The offshore Chinese Yuan wavers but stays above last week's low against Dollar.

In the currency sphere, Australian and New Zealand dollars are registering mild declines alongside the greenback. On the flip side, Canadian dollar, Euro, and Swiss Franc exhibit a modest uptick. However, any drastic movement in major currency pairs are yet to be seen, with almost all major pairs and crosses stuck inside Friday's range.

Investors should gear up for a potentially subdued trading ambiance in the next couple of days, given the sparse economic calendar. Nevertheless, Wednesday promises some action with release of PMIs from pivotal economies and Canadian retail sales data. Undoubtedly, the week's crescendo will be the eagerly awaited annual Jackson Hole symposium, culminating in Fed Chair Jerome Powell's address.

Technically, WTI crude oil recovers notably today and appears to have defended 78.72 near term support well on first attempt. The development keeps near term outlook neutral at worst, with prospect of resuming the larger rise from 63.67 through 84.91 resistance towards 90 handle at a later stage. However, firm break of 78.72 support, will argue that this rebound has completed, and bring deeper fall back to 74.74 resistance turned support, probably together with deterioration in risk sentiment elsewhere.

In Asia, at the time o writing, Nikkei is up 0.61%. Hong Kong HSI is down -1.38%. China Shanghai SSE is down -0.38%. Singapore Strait Times is down -0.45%. Japan 10-year JGB yield is up 0.012 at 0.643.

July 2023 has been a challenging month for New Zealand's trade scenario, as the island nation witnessed a steep fall in both goods exports and imports. Data released depicted a substantial decline, with exports plunging by NZD -890m or -14% yoy, concluding at NZD 5.5B. Concurrently, imports saw a -16% yoy decline, falling NZD -1.2B to settle at NZD 6.6B for the month. This decrease in trade volumes culminated in a monthly trade deficit of NZD -1.1B. This significantly overshadows market expectations of NZD -0.05B.

Zooming in on the country-by-country trade details, China conspicuously led the downturn in both exports and imports. New Zealand's exports to the Asian giant dipped by -24% yoy, translating to a decline of NZD -407m while imports reduced by a staggering NZD -427m, down -25% yoy.

However, not all trade relations showed a contraction. Australia the U.S. emerged as silver linings, with their exports experiencing an upward trajectory. Exports to Australia saw an 8.9% yoy growth, adding NZD 59m to the tally, and U.S. followed suit with a 16% yoy rise, upping the figure by NZD 105m.

Yet, as New Zealand engaged with its other major trade partners, the news wasn't all positive. European Union and Japan both registered a decrease in exports, declining by -16% yoy (NZD -73m) and -21% yoy (NZD -84m) respectively. On the import front, while USA and South Korea posted a rise of 24% (NZD 166m) and 18% (NZD 71m), both European Union (up 1.9% yoy) and Australia (down -2.7% yoy) experienced mixed results.

In a somewhat anticipated move, China's PBoC made a cut to its one-year loan prime rate by 10bps, settling it at 3.45%. This is a slight deviation from the 15bps reduction that the majority of economists had forecasted. What stands out is that this marks the second reduction in this rate in just a span of three months.

However, eyebrows were raised when PBOC decided to keep its five-year LPR — the benchmark for most mortgages in the country — steady at 4.2%. This move defied expectations of a 15 bps cut by many market watchers. The unaltered five-year LPR is being read by many as a signal of Chinese banks' hesitancy to compromise their rate differential margin. Such reluctance throws into sharp relief potential concerns about the effective transmission of PBOC's policy decisions into the broader market landscape.

Furthermore, it stirs up conversations about the central bank's capability to invigorate the property sector and the broader economy through monetary easing strategies. This narrative is all the more potent given that this decision on the one-year LPR came on the heels of an unexpected reduction in PBOC's medium-term policy rate just a week earlier. To give specifics, PBOC had reduced the one-year medium-term lending facility rate by 15 basis points, bringing it down to 2.50% from its previous 2.65%.

Considering these rate adjustments, many financial experts are now projecting more proactive measures from the PBOC in the forthcoming months. This may encompass further rate trims as well as potential reductions in the reserve requirement ratio for banks.

As the financial world turns its gaze towards the Annual Jackson Hole Symposium from August 24-26, expectations are mounting on the discussions surrounding "Structural Shifts in the Global Economy." This renowned gathering, drawing in elite central bankers from across the globe, stands as a barometer for gauging the future trajectory of monetary policies.

The spotlight is set to shine brightest on Fed Chair Jerome Powell's speech this Friday. The backdrop is intriguing. On one hand, post-July FOMC meeting data reveals easing pressures on prices and wages in the U.S., tilting the scales towards concluding the ongoing tightening phase. On the other, the undeniable vitality in labor markets coupled with robust consumer spending suggests that price pressure isn't backing down anytime soon. Market stakeholders will be keen to dissect how Powell balances these contrasting narratives in his address.

Yet, for those expecting a seismic shift in Fed's stance, disappointment might be on the horizon. The overarching narrative is likely to remain consistent – a commitment to combating inflation, while leaving the door ajar for a potential September rate hike. It's also prudent to remember that decision-makers at Fed will have another round of CPI and non-farm payroll data at their disposal before the crucial FOMC verdict on September 20. As for hints on the timing of inaugural rate cut, Powell is anticipated to toe the line, emphasizing the need for interest rates to remain restrictive for as long as the situation demands.

While Powell's speech will be the main event, it's the off-stage whispers that could provide invaluable insights. Observers should attune their ears to the informal comments from other Fed officials. Their words might just offer a glimpse into the hawkish vs. dovish balance within the committee.

Amidst the Jackson Hole fervor, the broader economic calendar for the week seems relatively subdued, characteristic of the last full week of August. Yet, there are some metrics worth the watch. PMI figures from the heavyweights – Australia, Japan, Eurozone, UK, and U.S. – are poised to dominate headlines. With the services sector being the bulwark of major economies, even as manufacturing grapples with recessionary winds, any signs of fading momentum here could spark concerns. The looming question: How soon before the manufacturing downturn spills over to services?

Beyond PMIs, analysts will also be tracking U.S. durable goods orders, Germany's Ifo business climate index, Canada's retail sales, and New Zealand's trade balance and retail metrics. All in all, an eventful week beckons for financial market aficionados.

Intraday bias in EUR/AUD is turned neutral first as consolidation from 1.7062 temporary top is extending. Further rally is expected as long as 1.6737 support holds. Break of 1.7062 will resume larger up trend from 1.4281 to 1.7377 projection level.

In the bigger picture, the rise from 1.4281 (2022 low) is in progress. Next target is 100% projection of 1.5254 to 1.6785 from 1.5846 at 1.7377. For now, outlook will stay bullish as long as 1.5846 support holds, even in case of another pull back.