The US Dollar mostly outperformed against its major counterparts this past week. The British Pound, Euro and Canadian Dollars were some of the worst-performing majors while the Chinese Yuan and Australian Dollar fared better. Taking a look at commodities, gold performed well while crude oil prices weakened.

Since the beginning of this month, financial markets have been slowly pricing in a higher terminal rate from the Federal Reserve, causing a steepening of longer-term Treasury yields relative to front-end ones. According to implied policy rates, since July 31st, markets have added over 30 basis points to the 3-year Fed rate outlook.

On top of that, it means financial markets have also been pushing back rate cut expectations. Fed Chair Jerome Powell spoke at Jackson Hole this past week, adding that the central bank is prepared to increase borrowing costs further if appropriate. Sentiment has been responding accordingly, with US equity markets turning lower of late.

Looking at the week ahead, the economic docket is more active. From the US, consumer confidence, the Fed’s preferred inflation gauge and non-farm payrolls are due. Elsewhere, multiple gauges of inflation from key European countries will cross the wires. Financial markets will also get a better look at China’s increasingly fragile economic situation with manufacturing PMI gauges due. What else is in store for markets in the week ahead?