Global equity markets received a boost on Tuesday after remarks from Fed governor Lael Brainard lowered the odds of an imminent rate hike when the Federal Reserve meets next week. Markets were anxiously awaiting Brainards’ comments to see whether recent economic data were was sufficient to turn one of the most dovish members into a hawk, but she made it clear that there are a’s number of factors to be taken into consideration before pulling the trigger on hiking rates such as the absence of accelerating inflationary pressures and risk from abroad.

Fed officials who were trying so hard to prepare markets for tightening monetary policy as early as September are now being ignored, as future traders are pricing in just a 15% chance for a hike in September down from 28% before Ms. Brainard spoke.

Although delaying a rate hike might continue to provide some artificial support to equity markets I still believe that valuations are high and aren’t supported by economic fundamentals or corporate earnings. When looking at last Friday’s price action, all major U.S. indices dropped by more than 2%., Wwhile gold and U.S. 2-years treasury bonds, which are supposed to be more sensitive asset classes to changes in monetary policy, just fell slightly. This indicates that we are likely to enter a phase of sharp volatility heading into fourth quarter, with risks tilted to the downside.

The greenback traded slightly lower against most of its major peers on Monday but remained in a relatively tight range today. Today’s UK inflation data is likely to provide some price action on the pound with August CPI expected to reach its highest level since December 2014 at 0.7%. But the more interesting release this time is from PPI’s input prices which is forecasted to show a huge spike of 8.1% in August compared to 4.3% in July, making the case harder for BoE to continue loosening monetary policy when the central bank meets on Thursday.