Quiet Friday ahead Powell speech

On Friday, European markets traded relatively mutedly as investors delayed taking positions ahead of Chair Powell's speech.

It looks like US stock markets will open higher later today, recovering some of Thursday's losses, while their direction is mainly dependent on Powell's statement from Jackson Hole.

Powell is scheduled to speak on tapering at 10 AM EDT (1400 GMT), and his remarks are expected to offer an overview of when the Fed will begin to reduce its bond-buying. Consequently, the unprecedented monetary support the central bank provided during the Coronavirus outbreak would come to an end.

As a result of the Coronavirus pandemic, the Federal Reserve has been buying $120 billion in US Treasury bonds and mortgage-backed securities each month. Still, now, it is focusing on reducing the stimulus as the officials called for a tapering of Federal Reserve bond purchases.

Given that the macroeconomic landscape has deteriorated since the policy meeting in July, it is expected that Powell will remain more cautious this week while laying the groundwork for an eventual taper.

The dollar will find support if Powell downplays Delta variant effects and merely affirms the outlook for tapering in October.

There are also economic data releases scheduled for Friday, including personal income and spending figures for July and the core PCE price index, the Fed's preferred inflation gauge that has been close to a 30-year high.