Hawkish Fed and Middle East Tensions Send Markets into Risk Aversion Mode

The week began with increased risk aversion across global markets in response to Federal Reserve Chairman Kevin Warsh's hawkish tone during the Jackson Hole symposium. He emphasized the importance of fighting inflation, fueling expectations for a prolonged period of high interest rates in the US.

Geopolitical tensions in the Middle East and the Strait of Hormuz are also causing concern, leading to higher oil prices and downward pressure on Asian stock indices.

The day will be marked by the release of preliminary CPI inflation estimates from Germany and Poland, as well as GDP dynamics readings for the second quarter from those countries and Turkey. The Chicago PMI indicator will be a key focus in the afternoon for US investors.