With US markets closed for Presidents Day, global financial markets showed mixed results on Monday. European stocks edged higher, building on the positive momentum from last week, despite the lack of US trading activity.

As the global economic landscape contends with rising uncertainties, recent economic downturns in the UK and Japan raise fears of recession, shaking the stability of worldwide markets. The UK has entered a technical recession after its economy shrank in the last quarter of 2023, showing how fragile its recovery is. Japan also fell into a recession and was surpassed by Germany as the world’s third-largest economy, marking a difficult start to the year and revealing weaknesses in its economy.

In a healthy rebound from the previous day’s losses, Wall Street saw a notable recovery on Wednesday, driven by a mix of better-than-expected earnings reports and a steadying of economic indicators. The Dow Jones Industrial Average climbed by 151.52 points, while the S&P 500 and Nasdaq Composite advanced by 0.96% and 1.3% respectively.

In a remarkable display of sustained bullish momentum, Wall Street witnessed a surge of optimism as the Dow Jones Industrial Average marked its ninth consecutive day of gains. Propelled by the Federal Reserve’s recent dovish shift in interest rate policy, the market displayed confidence, with the Dow climbing over 200 points.

In a session reflective of the varying dynamics of today’s economy, Wall Street on Friday showcased a mixed performance with the Dow Jones Industrial Average and Nasdaq Composite climbing higher, while the S&P 500 slightly recoiled.

The financial markets are in a risk-off mood, as investors are concerned about the global economic outlook. The stronger US Dollar is likely to continue to weigh on commodities and other risk assets.

The Reserve Bank of Australia (RBA) is expected to hold interest rates at 4.10% at its meeting tomorrow, according to a majority of analysts.

The AUD is trading lower today, but we continue to think that the currency offers value at the current levels. The main focus for the markets today will be the NFP and ISM Mfg PMI reports. A miss in either of these reports could be a bullish catalyst for the AUD.

The focus today will be on the US jobless claims and PCE data.

The US Dollar (DXY) fell sharply on Wednesday after the release of weak US labour market data.

Emotions are a powerful force that can have a significant impact on our decision-making. In trading, this can be especially dangerous, as emotions lead to rash decisions that can cost us money.

The main highlight of today’s session will be the Jackson Hole Symposium and the speeches for both Fed Chair Powell, and ECB President Lagarde.