Happy hour cancelled, midnight watch as traders brace for Fed chief's speech

Federal Reserve chairman Jerome Powell is expected to restate his resolve to fight inflation on Aug 26, 2022. PHOTO: AFP

SINGAPORE (BLOOMBERG) - From cancelling Friday night trips to the pub to pushing back soccer practice, global investors are pulling out all the stops to ensure they are ready for the most important gathering of central bankers this year.

Mr Min Gyeong-won is taking no chances as the countdown begins to the Federal Reserve's landmark Jackson Hole event, where chair Jerome Powell is expected on Friday (Aug 26) to restate his resolve to fight inflation and push back against bets that he will take his foot off the pedal next year.

Instead of enjoying happy hour at Busan Bokjib in Seoul, the economist at Woori Bank will be glued to his screens as Mr Powell takes center stage.

"This is more important than jobs data in the US, and even more than previous Jackson Hole meetings," Mr Min said.

He is not alone. Market participants from Tokyo to Sydney are axing dinner plans and sacrificing weekend activities to prep for what could be a rocky Monday trading session if Mr Powell's comments reshape views on the path of monetary tightening around the globe.

Recent market action underscores trader nervousness. Global stocks slumped at the beginning of the week before attempting a tentative recovery and bond yields have pushed higher. The closely watched CBOE Volatility Index jumped from a mid-August slumber.

Mr Powell's speech will land late at 10pm for Tellimer's Mr Nirgunan Tiruchelvam in Singapore, so he is aiming to kill two birds with one stone - attempt to enjoy his evening at the pub while keeping tabs on markets.

"I am preparing for Jackson Hole by checking the watering holes of Boat Quay a bit longer than my usual time," said the head of consumer equity research in Singapore. "Some of my clients from hedge funds and long-only ones will be joining me in this quest."

That is not an option for Mr Brian Gould in Melbourne, who is staying up for late meetings with peers in London and the United States to help monitor markets in the event that Mr Powell's speech spikes volatility.

"It will be midnight Sydney time and it is not ideal, but you do what you have to do," said the head of trading at Capital.com. He plans to arrive at his Collins Street office before dawn on Monday.

Done deal

To be sure, not everyone is staying up.

Mr Darren Langer, co-head of fixed income at Yarra Capital Management in Sydney, is one of them. Experience has taught the 30-year bond veteran that central bankers tend to telegraph their policy thoughts well ahead of the symposium, so sitting up for it "is not going to really change our view" on markets.

"It is usually a cerebral love fest for the central banks to sort of talk more about central banking policy than it is necessarily about immediate concerns," he said. "Press conferences tend to be sometimes where they might let something slip, but the Fed speak has been all from the same sheet."

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