TMGM Daily Market Breakfast: 29 August 2026

Morning Snapshot

• Federal Reserve Chair Kevin Warsh’s Jackson Hole remarks put inflation back at the center of U.S. policy discussions, lifting the U.S. Dollar and prompting markets to raise the implied probability of a September rate hike to about 56%-57% from roughly 36% before his speech.
• Cleveland Fed President Beth Hammack said it was time for the Federal Reserve to act with rate hikes, reinforcing the hawkish tone from U.S. central-bank officials.
• Canada’s economy grew 0.8% quarter-on-quarter in the second quarter, accelerating from a revised 0.1% increase in the first quarter, according to Statistics Canada.
• Bank of England Governor Andrew Bailey said he does not see significant second-round inflation effects in the UK ahead of the BoE’s next policy meeting.
• ECB policymaker Martin Kocher said Europe’s economy is showing more momentum and warned that the backdrop poses risks to price stability.
• Japan’s latest inflation and labour-market data were seen as meeting conditions the Bank of Japan has been watching ahead of next month’s policy decision, while the yen weakened for a fifth straight session.
• Qatar’s extended force majeure on LNG exports kept attention on the Strait of Hormuz, with constrained shipping traffic threatening European winter gas balances and raising competition for alternative cargoes in Asia.
• Royal Bank of Canada said escalating Canada-U.S. trade tensions and broader tariffs are straining cross-border supply chains, with the auto sector among the most exposed.
• The SEC declared effective the registration statement for Evernorth Holdings’ proposed merger with Armada Acquisition Corp. II, clearing the way for a shareholder vote on September 30 and a potential Nasdaq listing under XRPN.

Market Developments

Foreign Exchange

The U.S. Dollar Index rose 0.36% to around 99.50 after Kevin Warsh’s Jackson Hole remarks. EUR/USD fell about 0.48% toward 1.1595, GBP/USD traded near 1.3538 after a 0.40% decline, and the Mexican Peso weakened more than 0.42% against the U.S. Dollar.

Commodities

Gold fell more than 0.42% as higher U.S. yields and a stronger dollar followed the Fed’s hawkish shift, while Brent, WTI and Dutch TTF gas prices remained sensitive to ongoing disruption around the Strait of Hormuz and Qatari LNG supply constraints.

Macroeconomics & Central Banks

Warsh’s Jackson Hole Remarks Reprice U.S. Rate Expectations

Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to stress that restoring price stability remains the central bank’s predominant focus, saying policymakers still have “work to do” if they cannot be confident that underlying inflation is moving toward target. He said the Fed’s 2% Personal Consumption Expenditures inflation objective is “firm and fixed,” argued that summer inflation readings had improved but were not enough to show a meaningful shift in underlying price dynamics, and said he would be “hard-pressed” to describe current financial conditions as restrictive.

Warsh also gave an upbeat assessment of the U.S. economy, describing consumer spending as healthy, the labour market as stable and business investment as rising rapidly. The combination of persistent inflation concern and resilient activity triggered a sharp repricing in rate expectations, with the CME FedWatch Tool showing markets assigning roughly a 56%-57% chance of a September rate hike, up from around 36% before the speech.

The move supported the dollar across major pairs. The U.S. Dollar Index rose 0.36% to around 99.50, EUR/USD fell about 0.48% toward 1.1595, GBP/USD traded near 1.3538 after a 0.40% decline, and the Mexican Peso weakened by more than 0.42% against the U.S. currency. Gold also fell more than 0.42% as the stronger dollar and higher Treasury yields weighed on the metal.

Hammack Says the Fed Should Move With Rate Hikes

Cleveland Federal Reserve President Beth Hammack said in a Bloomberg interview that it was time for the Fed to act with rate hikes, adding that waiting would create pain. Her comments added to the day’s hawkish tone from U.S. policymakers as markets reassessed the near-term policy path after Warsh’s speech.

Canada’s Second-Quarter GDP Growth Accelerates to 0.8%

Statistics Canada reported that gross domestic product grew 0.8% quarter-on-quarter in the second quarter. That marked a sharp acceleration from the revised 0.1% increase recorded in the first quarter, which had previously been estimated at 0%.

BoE Governor Bailey Says UK Second-Round Inflation Effects Remain Limited

Bank of England Governor Andrew Bailey said in an interview with Bloomberg TV at Jackson Hole that he does not see significant second-round inflation effects in the UK. The comments came ahead of the Bank of England’s next policy meeting and suggested concern about broader inflation persistence had not materially intensified.

ECB Officials Highlight Stronger Momentum and Inflation Risks

Martin Kocher, governor of Austria’s central bank and a member of the European Central Bank, said Europe’s economy is showing more momentum and that the backdrop threatens price stability. His remarks added to a run of hawkish commentary around the ECB as energy-related inflation risks remain in focus.

Separate market commentary from Nomura said it expects the ECB to raise rates by 25 basis points to 2.50% at its 10 September meeting, citing higher HICP inflation and resilient growth. The note said Brent crude and Dutch TTF gas prices remain central to the inflation outlook, with gas-price pass-through seen as broader and more persistent.

Japan Data Keep Bank of Japan Policy in Focus

Japan’s latest inflation and labour-market data were presented as meeting the conditions the Bank of Japan has been watching ahead of next month’s policy decision. At the same time, the yen weakened for a fifth consecutive session, underscoring the market’s focus on whether incoming data will translate into policy action.

Energy, Trade & Corporate Developments

Hormuz Disruption and Qatari LNG Force Majeure Keep Gas Supply Risks Elevated

Qatar’s extended force majeure on LNG exports to European and Asian buyers kept a major source of global gas supply offline as traffic through the Strait of Hormuz remained heavily constrained. The disruption has left Europe exposed to tighter gas supply ahead of winter, with LNG prices already described as close to double pre-war levels.

The supply interruption is also intensifying competition with Asian buyers for alternative cargoes, raising import costs and reviving concern about energy-driven inflation through industrial and household channels. Iran has indicated that reopening the Strait of Hormuz could form part of a broader deal if unspecified U.S. conditions are met, keeping the shipping route central to any de-escalation.

RBC Flags Rising Strain From Canada-U.S. Tariff Escalation

Royal Bank of Canada said escalating trade tensions between Canada and the United States, including U.S. Section 338 tariffs and Canadian countermeasures, are again clouding the economic outlook. RBC said baseline forecasts for both economies remain stable, but specific sectors, regions and cross-border supply chains face significant pressure as tariffs rise and broaden.

The bank highlighted the auto sector as particularly exposed because of deep cross-border supply-chain integration. It also said Canadian travel spending has already shifted sharply away from U.S. trips, while retaliatory tariff measures are designed to change consumer and business buying behaviour to reduce the amount of tariffs ultimately paid.

SEC Clears Evernorth-Armada Registration for Shareholder Vote

The U.S. Securities and Exchange Commission declared effective the registration statement tied to Evernorth Holdings’ proposed business combination with Armada Acquisition Corp. II. The decision allows Armada shareholders to vote on the transaction at a special meeting scheduled for September 30.

If approved, the combined company is expected to list on Nasdaq under the ticker XRPN. Evernorth said the milestone moves it closer to completing the transaction and advancing its strategy to hold and actively manage an XRP treasury.

Upcoming Key Events

• Armada Acquisition Corp. II Shareholder Meeting — null: Armada shareholders are scheduled to vote on the proposed business combination with Evernorth Holdings on September 30 after the SEC declared the registration statement effective.
• European Central Bank Policy Meeting — null: The ECB’s next policy meeting is scheduled for 10 September, with market attention on inflation, growth resilience and energy-price risks.