Dollar and Yields Await Cues From Warsh: 3-Minutes MLIV

Summary

Adam Jensen discusses whether Fed Chair nominee Kevin Warsh's upcoming remarks will move markets, outlining a scenario that could undermine the dollar and steepen the US yield curve. He also sees European stocks facing downside risks after earnings support fades amid energy and political pressures. French assets may continue to underperform given mixed data and a lack of fiscal consensus.

• Warsh speech is the main market focus, with a live debate on whether it will matter.
• An evasive Warsh on inflation could undermine the dollar and steepen the US yield curve.
• A more constructive framework could restore Fed credibility and avoid that market reaction.
• European stocks are described as a holding pattern with risks tilting lower.
• Rising natural gas prices, diesel supply issues, Ukraine escalation and political risk are cited as European equity risks.
• French August CPI came in slightly above expectations while Q2 GDP was slightly softer.
• French-German spreads are widening and French assets could continue to underperform amid fiscal uncertainty.