Here are this mornings headlines:

Federal Reserve Tapering Announcement
We are experiencing typical market trepidation as we get closer to the Federal Reserve announcement from Fed Chair Powell at 2pm today, in Jackson Hole. The underlaying reasons for US equities falling are twofold. Firstly, we are starting to hear a lot of Hawkish comments coming from the Federal Open Market Committee, which can often be translated as a precursor for unwinding their QE program. Powell is a renowned as being notoriously Dovish, so should he pour water on the hopes of a tapering announcement, then we could experience a lot of USD price action. Secondly, with the distressing situation in Afghanistan still unfolding, we are seeing an investors move out of riskier asset classes, and into safe haven assets, like the US Dollar. Currently the market view is divided as to whether or not the announcement later today is likely to yield any affirmative action, however one things is clear, the hawkish voices are getting louder, regarding the US economy, if the data confirms this view, Powell’s dovish comments could be overlooked. There is also the very visceral fear that the Delta variant is finding stronger footing in the US, with cases surging 700% since July, and the efficacy of the vaccine now being brought into scope, making a decision to remove fiscal stimulus could prove premature until the virus is brought under control.

The crisis in Afghanistan, which was already very volatile, unfortunately took a turn for the worst yesterday with a pair of explosions outside Kabul’s international airport, killing 13 Americans and at least 60 Afghans. We have all seen some of the harrowing images of women and children desperately trying to leave the country before the total withdrawal of NATO and American troops. So far, tens of thousands of people have been evacuated since August 13th, only days before the Taliban took control. The incendiary situation has resulted in many nations pausing their evacuation attempts, with the threat of terror attacks too great to continue their admirable efforts to rescue whoever they can. “They’re real and significant challenges that we also have to take into consideration the longer we stay, starting with the acute and growing risk of an attack by a terrorist group known as ISIS-K, an ISIS affiliate in Afghanistan, which is a sworn enemy of the Taliban as well,” Biden said Tuesday. “Every day we’re on the ground is another day we know that ISIS-K is seeking to target the airport and attack both U.S. and allied forces and innocent civilians.” Biden has continued to let the tail wag the dog, by allowing the Taliban to dictate terms, which means everyone needs to be gone by the 31st August, or “there will be consequences.” The President addressed the world last night, in a sombre conference, where he took responsibility for “all that’s happened of late”, while remaining obstinate over his plans to fully withdraw troops by August 31st. Biden also had another clear message, “To those who carried out this attack, as well as anyone who wishes America harm, know this — we will not forgive, we will not forget, we will hunt you down and make you pay.” As the situation continues to get demonstrably worse, this speech was inevitable, as is an American retaliation.

French Toast
Michel Barnier, the European Union’s former Brexit negotiator has decided that he has not quite finished with his foray into the political landscape, and has intimated that he will represent the French Republican party, in the upcoming presidential elections. Surprisingly, Barnier is a fairly unrecognisable figure in France, and outside the Brussels arena, so he will need to establish himself beyond the foreign affairs and agriculture roles he previously held, if he is to successfully challenge Emmanuel Macron.

Have a great weekend.

​​​This Morning Report was brought to you by Alex Ayoub


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