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Need to Know: The Fed’s not boring anyone into submission after all. The dollar might be to blame.

For all the talk about how the Federal Reserve was going to bore markets into submission with endless talk about tapering, it’s noteworthy that the S&P 500

suffered its worst decline in a month on Wednesday. There wasn’t really anything shocking or surprising in the minutes from the Fed’s July meeting that was released on Wednesday, but the message is clear enough: The bond buying is going to stop, barring an economic catastrophe.

The losses looked set to continue on Thursday, and analysts are looking at the strength of the U.S. dollar

— up to a nine-month high — as one factor why.

Kit Juckes, macro strategist at Société Générale, said he thinks short-term interest rates

are what’s moving markets.

“Chances are that the dollar will go on benefiting from the focus on the Fed, but can’t go very far, given how far away the first rate still is. Maybe that means that the real driver will be positioning — the speculative market was bearish and short of the dollar a few months ago and is now square, at least, if not already long,” he wrote.

“I’m tempted to think that the recent pattern of marginal new highs by the dollar followed by a period of choppy trading, will continue, and will edge EURUSD

down to 1.16, or even a bit below that, in the coming couple of weeks,” he said.

Marshall Gittler, head of investment research at BDSwiss Holding, noted the dollar’s strength even as bond yields

fell. “That either means the dollar is trading as a safe-haven currency — which it hasn’t been recently — or it’s the famous ‘monetary policy divergence’ theme in play. If the latter, that would suggest further dollar strength on the horizon,” he said.

The buzz

A new U.K. study based on the country’s real-world experience found diminished effectiveness from coronavirus vaccines to the delta variant, and also found that the initial outperformance of two doses of the vaccine from Pfizer

and BioNTech

eroded after four to five months to the level of two doses of the Oxford-AstraZeneca

vaccine. Separately, economists at Goldman Sachs lowered their third-quarter U.S. growth forecast to 5.5% from 9%, though they raised their expectations for the next four quarters.

The economics docket includes the latest weekly jobless claims figures, and the Philadelphia Fed manufacturing index for August.

Retailers Macy’s

and Kohl’s

each handily beat earnings forecasts. After the close, chip-equipment maker Applied Materials

reports results.

Robinhood Markets

slumped, as the online broker issued a cautious outlook, saying third-quarter trading volumes would be lower.

Graphics microchip maker Nvidia

rose in after-hours trade after reporting record data-center and gaming revenue, as it struggles to complete the acquisition of microchip designer ARM from SoftBank.

Goldman Sachs

reached a $1.9 billion deal to buy NN Investment Partners, which has $355 billion in assets under supervision.

The markets

More red on the screen as U.S. stock futures


traded lower.


and copper

futures each slumped by 3%. The CAC 40 lost over 2% in Paris, as in addition to the growth worries, luxury-goods makers including LVMH Moet Hennessy

dropped on worries over China’s crackdown on the wealthy.

Random reads

Comedian Larry David and legal scholar Alan Dershowitz are no longer friends, it seems.

A new high (low?) in over-the-top weddings. (The groom, it should be noted, can absolutely afford it.)

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