According to Jinshi Data, the Euro Stoxx Volatility Index has risen this week. Although three Fed officials hinted at a rate cut in September on Thursday and expressed support for a "slow and methodical" path of rate cuts, investors are still worried about an unexpected turn in Powell's speech at the Jackson Hole Symposium tonight.
U.S. stocks also fell overnight. Daniela Hathorn, senior market analyst at Capital.com, said: "Powell never provides very clear information. We will definitely get confirmation about the rate cut today, but I would not be surprised if he still shows hesitation."
The pan-European Stoxx 600 index is set to post a 1% gain this week, on track for three straight weeks of gains, a streak last seen nearly five months ago. Still, it has lagged the S&P 500 for the year. “There’s still momentum in the U.S. because we still haven’t seen rate cuts,” Hathorn said. “But the ECB has already started cutting rates, earnings are starting to weaken, and what else is there to drive growth? That’s where investors are right now.”
