Global stocks traded lackluster this week with most major markets oscillating between losses and gains as anxiety ahead of Friday’s Jackson Hole gathering forced investors to remain on the fence.

Asian stocks displayed signs of weakness on Friday led by a decline in Japanese shares as investors avoided risk before the Yellen speech. European markets were heavily pressured by slumping healthcare stocks on Thursday with further declines expected if Asia’s bearish contagion entices sellers to attack.

The ongoing uncertainty over US rate hike timings and depressed oil prices have already left Wall Street vulnerable to steep losses. Asia, Europe, and America could be painted in red on Friday if the horrible cocktail of falling oil, ongoing concerns over the global economy and pre Jackson Hole jitters encourages investors to scatter from riskier assets.

The stock market rally may be running out of steam with the events of today potentially providing a foundation for bears to install repeated rounds of selling. Oil prices remain heavily pressured by the oversupply concerns while the Fed divide has somewhat weighed heavily on global sentiment.

The ingredients for a bear market are visible and it could take an unexpected catalyst for stocks to start sliding down lower. Today’s Jackson Hole gathering could be quite critical, with expectations heightened over if Yellen will provide clarity on when the Fed may break the trend of central bank caution. If there is a further disconnect between markets and the Fed then jitter and risk aversion could leave stocks vulnerable to heavy losses.

Dollar on standby as Yellen speech looms
The Dollar remains on standby ahead of today’s heavily anticipated Jackson Hole gathering where Federal Reserve Janet Chair Yellen will deliver her keynote speech which could provide investors some clarity on US rate hike timings. A divided Fed this month has created a cloud of uncertainty over when the US rates will be hiked while the growing disconnect between the markets and central bank continues to weigh heavily on sentiment.

There is a strong possibility that Yellen attempts to heighten hopes over the Fed raising US rates at least once this year but the question is if market participants are prepared to listen.

Although inflation remains a dilemma in the US, overall domestic data still points to stability which could provide a compelling reason for there to be a live meeting to raise US rates in December.

A clear concise hawkish speech from Yellen could be the catalyst needed to dispel this extended period of uncertainty consequently strengthening the Dollar.

UK Q2 GDP in focus
Sterling traded lower on Thursday with the GBPUSD sinking towards 1.3170 as the persistent post-Brexit uncertainty haunted investor attraction towards the currency. Pound sensitivity could be a new theme moving forward with any positive data post-Brexit encouraging bullish investors to install heavy rounds of buying.

Although Sterling bulls were offered a lifeline from last week’s string of positive data which questioned the Brexit scare, more time may be needed to truly gauge the ramifications of Brexit to the UK. Investors may direct their attention towards the revised second quarter GDP release for the UK economy which could offer some clarity on how the nation is faring in a period of global uncertainty.

While most expect Q2 GDP to be 0.6%, a result which fails to meet expectations could spark speculations of the Bank of England cutting UK rates to near zero consequently leaving the Sterling open to losses.

WTI Oil Remains Pressured
WTI Oil was pressured further on Friday with prices trading towards $47 after comments from Saudi energy minister quelled expectations of a production freeze which rekindled concerns over the ongoing oversupply.

Saudi Arabian Energy Minister Khalid Al-Falih stated that any significant intervention in the market may not be necessary other than to allow the forces of supply and demand to find an equilibrium price and such questioned the relevance of the informal meeting in September.

The visible battle of words has elevated WTI to shocking levels with inflated expectations over a production freeze creating speculative boosts in oil prices. With crude oil stockpiles on the rise and rig counts rising incessantly, questions must be asked about the sustainability of the current oil rally.

OPEC has repeatedly exploited the oil prices sensitivity to prop up oil prices and although this is commendable such may come at a heavy price. If the informal meeting in September concludes without a production freeze deal, not only will the cartel’s credibility take a blow but oil could be vulnerable to heavy losses. From a technical standpoint, a breakdown below $46 could open a path towards $44.

Commodity Spotlight – Gold
Gold declined further on Thursday hitting fresh four-week lows at $1318 following the positive US Core durable goods report which dispelled some concerns over the health of the US economy consequently strengthening the Dollar.

This yellow metal has been under pressure this week with prices edging lower as the cloud of uncertainty over the Fed raising US rates in 2016 forces anxious investors to offload their bullish bets. With price sensitivity set to intensify today ahead of Yellen’s speech, Gold could be in store for another chaotic roller coaster ride.

A hawkish Yellen who provides the clarity investors have long sought over the future of a US rate hike could leave Gold open to heavy losses. On the other hand, if investors are left empty handed with the disconnect growing between the markets and Fed then Gold could be provided a lifeline. From a technical standpoint, bulls are pressured and need to keep above $1315 to remain in control.