This week is headlined by Chair Warsh’s keynote at the Kansas City Fed’s Jackson Hole Symposium on Friday morning at 10am ET. If Warsh sticks to big picture topics, we see the task forces and AI as most likely focal points for his comments. If, instead, he decides to delve into more policy-relevant topics – less likely in our view, we see him focussing more on 2% inflation target & tools (policy rate vs balance sheet) likely to achieve it. In US macro data this week, we have July core PCE (expected around .23% MoM), consumer confidence, Q2GDP 2nd estimate & initial jobless claims. We continue to believe Fed is likely to remain on hold for REMCY26 as inflation moderates & employment/housing moderates further from current levels. In UST dated supply, we have $69 Bn of 2 year UST auction on Tuesday, $70 BN of 5 year UST auction on Wednesday & $44 BN of 7 year UST auction on Thursday. We also have Nvidia quarterly results on Wednesday which shall provide direction to Mag-7 names. In RoW events, we have Australian CPI on Wednesday & Tokyo CPI on Friday. We expect Tokyo CPI to remain elevated giving credence to our view of two 25 bps hikes by BOJ in both Sep & Dec this year. In tariff news, US & Canada tariff talks have broken down leading to US imposing 50% tariffs on Canadian products from Saturday which is likely to see retaliation from Canada too. In middle east conflict, situation remains of no war no peace. Treasury Secretary Bessent is likely to announce new economic sanctions on Iran on Monday 10 am EST. Same day Pakistan army Chief Asif Munir is travelling to Iran. Traffic through SoH remains currently around 5-10 ships on a daily basis implying movement of 5-7 mbpd of crude. We expect Brent is likely range bound between 85-95 levels in near term.
