It was a very different story last year where central bankers were fighting runaway inflation and the message was that their respective feet were firmly on their local accelerators. Now it's the balancing act of conquering inflation while trying to maintain what little growth there is around.

(Video Transcript)

The Fed's central banking meeting

Now the Federal Reserve's central banking meeting gets underway in Jackson Hole, Wyoming later on today. We've been on about it all week and I think it's worth just highlighting exactly what the big pivot point might be when we're looking at the markets and the trading on the rest of today and tomorrow when we get the big statements coming through. Will it clear the air for the markets in terms of where central banks are going in terms of interest rates?

The U.S. dollar

Yields and the USD are falling ahead at the start of the symposium a little bit later on today. I want to begin first of all with a look at what's been happening with the U.S. dollar. Now don't get me wrong, this plot that we saw yesterday wasn't about the fact that people are expecting a message from Jackson Hole, it was all about purchasing managers' index (PMI) data. But I think certainly some of what's happening in the markets with yields down and the dollar down a little bit on from the highs that we saw yesterday, it might give some hope to the message that the worst of the global inflation shock is behind us. But what may come out is that while the quarter may be in sight, it has yet to be turned and we'll see some of these central banks continue to keep interest rates high.

The European Central Bank

We know that from market expectations, we know that there is the expectation that the European Central Bank is going to continue with its foot on the pedal. It was a very different story last year when central bankers were fighting runaway inflation. The message was that their respective feet were firmly on their local accelerators.

Now it's the balancing act of ensuring inflation seeps away in the hope that it doesn't kill what little fragile growth there is. In yesterday's trade, we went below the total retracement of this Fib in meaning that the euro was weak enough to pull back. Then came the fight back in the euro, not because of the euro up, more so because of that drop we saw in the dollar yesterday. So we're back now above what is this line of support taken down from the Fib, from the lows we had back on the 6th of July at 108.34, currently trading at 108.57.

Jackson Hole speeches

Where we go from here really does depend very much on what comes out of that symposium. I want to show you the other big cross where we've seen now as of today's trade ahead of the start of the Jackson Hole speeches. We've got a third and we have losses for turning against the US dollar. So it really is a question of where you see the markets and how you think this message is going to be perceived in the markets. We get the big speech tomorrow on Friday coming through from the Federal Reserve Chairman Jerome Powell.