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  • So much for that Evergrande recovery. Shares of the troubled Chinese property developer are down approximately -12% today following yesterday's impressive rally (biggest in a year)
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
  • There is a ridiculous number of scheduled Fed speeches on the docket next week. Powell specifically will be speaking multiple times including at an ECB hosted forum on central banking (which also has a panel with Fed, ECB, BOE and BOJ heads)
  • USD Ascending Triangle, Bullish for Q4 - #DXY chart on @TradingView
  • Credit rating agency Standard & Poor's is due to give its sovereign credit rating update on Germany today ahead of weekend national elections
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  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
  • Kansas City Fed President Esther George says: - The labor market friction is fading barring a resurgence of virus - A 'normal' economy is likely to remain elusive for some time - Asset buying effects complicate the judging rate change plan
Video: Will Seasonal Changes Revive Volatility and Restore Trend?

Video: Will Seasonal Changes Revive Volatility and Restore Trend?

John Kicklighter, Chief Strategist

Talking Points:

  • We look at the results of a poll asking what restores volatility: Jackson Hole; seasonality; or a 'crisis'
  • Remarks from Janet Yellen and others generated a significant move Friday, but follow through remains dubious
  • Historically, the VIX rises in August and the S&P 500 dives in September; but but volume remains the linchpin

What are the Traits of Successful Traders? See what our studies have found to be the most common pitfalls of retail FX traders.

Volatility and trend will eventually return for the financial markets, but the genesis for this revival remains unclear. A late burst of activity for risk-oriented assets this past Friday lifted hopes and appetites amongst traders parched for meaningful trading opportunity. Monetary policy commentary from the Jackson Hole Symposium certainly taped memories of past events which charged remarkable trends. Yet, in a poll conducted at the beginning of the week, few believed this event would supply the spark for a lasting move. And, despite the week-end volatility, I agree with this skepticism.

There are considerable limitations for the summit's rhetoric recharging a market waylaid by circumstance and disinterest. One of the more prominent hurdles comes in the form of seasonal restraints. We are heading into a week that holds the final days of August and opening days of September. Notably, this is the week that precedes the Labor Day holiday in the US. While the VIX volatility index has historically started to rise through the month of August, the S&P 500 has presented its trough in volume with little discernible predisposition towards performance.

It is the 'structural' limitations that have developed over months and years that truly burden the market. And, overcoming those restraints will likely require more than just the seasonal rebound in VIX and average drop in the equity index benchmark. A catalyst for participation (or volume) is needed. And, given the moral hazard and complacency that have taken root,that may very well take a crisis-like event. We weigh the market's susceptibility as opportunity in this weekend Strategy Video.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.