US stocks closed last week higher but volatility remains elevated heading into a busy week. US-Canada trade tensions escalated after talks broke down, with the US and Canada each imposing 50% tariffs. Oil extended its rally on Middle East risk, while bond yields stay in focus. The Fed’s Jackson Hole symposium and US Core PCE data are the week’s key highlights.
Market Review & Outlook
US stocks managed to finish last week on a positive note, but it was another volatile run for markets and there are few signs that this is likely to change in the week ahead. Bond yields moved firmly into focus early last week after US Treasury Secretary Scott Bessent announced plans to double Treasury buybacks in longer-dated bonds, while ongoing developments in the Middle East continued to keep geopolitical risk firmly on the radar.
Trade tensions are likely to take centre stage early this week after US-Canada trade talks broke down over the weekend. The US announced 50% tariffs on Canadian goods, with Canada responding in kind, creating another potential source of volatility for equity and FX markets.
Oil will also stay closely watched after prices rallied nearly 10% last week, with the situation in the Middle East continuing to escalate almost on a daily basis. The combination of higher energy prices, geopolitical uncertainty and elevated bond yields remains an uncomfortable backdrop for risk assets.
The major event later in the week will be the Federal Reserve’s annual Jackson Hole symposium, where the world’s major central bankers will gather. With markets continuing to assess the outlook for US interest rates, Fed Chair Kevin Warsh’s keynote speech will be closely watched for any clues around the next move in monetary policy. The macro calendar is relatively quiet overall, but the US Core PCE Price Index, Australian CPI and any fresh guidance emerging from Jackson Hole remain key data points to watch.
Key Events This Week
The key events worth watching this week include the US Core PCE Price Index, Australian CPI and the Jackson Hole Symposium, alongside a fuller calendar spanning Germany, the US and Canada.
| Date | Event | Market Focus |
|---|---|---|
| Tuesday | German IFO Business Climate Index | EUR |
| Tuesday | US CB Consumer Confidence | USD |
| Wednesday | Australian CPI | AUD |
| Wednesday | US Core PCE Price Index | USD |
| Wednesday | US Quarterly GDP | USD |
| Wednesday | US Crude Oil Inventories | USD |
| Friday | Jackson Hole Symposium – Fed Chair Kevin Warsh Keynote | USD |
| Friday | Canadian GDP | CAD |
Week Ahead Outlook
With markets already dealing with elevated geopolitical risks, trade tensions, higher oil prices and volatility in bond yields, Jackson Hole could provide the final catalyst for what is shaping up to be another interesting week across global markets.