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Focus on Powell’s speech in Jackson Hole

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People take photos of the Grand Tetons in Grand Teton National Park where financial leaders from around the world gather for the Jackson Hole Economic Symposium, outside Jackson, Wyoming, August 25, 2022.

Jim Urquhart | Reuters

LONDON — European markets fell on Friday as global attention shifts to US Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole economic symposium.

The pan-European Stoxx 600 was down 0.4% in the early afternoon, after returning to opening gains of around 0.5%. Basic resources gained 1.2% while travel and leisure stocks fell 1.5%.

Powell is due to speak at 3pm London time, and investors around the world will be on the lookout for clues as to the pace and trajectory of the central bank’s monetary policy tightening efforts as it seeks to contain inflation.

While the market will also be looking for the prospect of a future dovish pivot once price increases are deemed under control, many analysts expect the president to adopt a hawkish tone and reiterate the Fed’s commitment to bring inflation back to target.

“Powell is likely to push back on premature expectations of a dovish pivot, reiterating the focus on tackling high inflation and the Fed’s reliance on data,” said Silvia Dall’Angelo, senior economist at Federated Hermes.

“While the latest US inflation data has been encouraging, suggesting that headline inflation may have peaked in June, the Fed is not off the hook: inflation is still very high, there are still has pricing pressures in the pipeline and the outlook for commodity prices is uncertain amid ongoing geopolitical tensions.”

U.S. equity futures were flat in early premarket trading after a steady positive session on Wall Street on Thursday, while Asia-Pacific stocks rose Friday afternoon.

Back in Europe, a German consumer sentiment reading for September is due on Friday, along with French and Italian consumer confidence data for August.

UK energy regulator Ofgem also announced its latest increase in the country’s energy price cap, offering a bleak look at the trajectory of the worsening cost of living crisis and inflation outlook. United Kingdom.