US President Donald Trump may not be "thrilled" with the direction of the Federal Reserve's plans to raise interest rates, but global equity markets seem pretty relaxed.

This week in finance: Company results: Boral (Wed) Ramsay Healthcare (Thur), Harvey Norman (Fri)

Company results: Boral (Wed) Ramsay Healthcare (Thur), Harvey Norman (Fri) Local data: Q2 Capex (Thur) Building approval (Thur)

Local data: Q2 Capex (Thur) Building approval (Thur) Overseas data: US GDP (Wed) US inflation (Thur) China manufacturing (Fri)

Federal chair, and Mr Trump's pick for the job, Jerome Powell signalled more rate rises on their way this year in a speech at the annual central bankers' retreat in Jackson Hole Wyoming.

It was all "steady as she goes", even if the big investors saw it as a little dovish.

Mr Powell differs from his predecessors speaking in a fairly direct manner saying he wasn't overly worried about inflation taking off and saw little need to rush things.

"We have seen no clear sign of an acceleration [of inflation] above 2 per cent ... there does not seem to be an elevated risk of overheating," he told his fellow central bank bosses.

"If the strong growth in income and jobs continues, further gradual increases in [the target rate] will likely be appropriate."

The immediate reaction was the stock market went up and the US dollar went down, and short-term interest rates in the US edged up, while longer dated bonds edged down.

Markets on Friday's close: ASX SPI 200 futures flat at 6,220 ASX 200 (Friday's close) flat at 6,247

ASX SPI 200 futures flat at 6,220 ASX 200 (Friday's close) flat at 6,247 AUD: 73.2 US cents, 63.0 euro cents, 57.0 British pence, 81.5 Japanese yen, $NZ1.09

AUD: 73.2 US cents, 63.0 euro cents, 57.0 British pence, 81.5 Japanese yen, $NZ1.09 US: Dow Jones +0.5pc at 25,790 S&P500 +0.6pc at 2,875 NASDAQ +0.9pc at 7,946

US: Dow Jones +0.5pc at 25,790 S&P500 +0.6pc at 2,875 NASDAQ +0.9pc at 7,946 Europe: FTSE +0.2pc at 7,577 DAX +0.2pc at 12,395 EuroStoxx50 +0.2pc at 3,427

Europe: FTSE +0.2pc at 7,577 DAX +0.2pc at 12,395 EuroStoxx50 +0.2pc at 3,427 Commodities: Brent oil +1.5pc at $US75.82/barrel, Gold +1.7pc at $US1205/ounce, Iron ore $US65.80/tonne

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While equity traders seem happy enough at the moment, bond dealers have a different narrative on the longer term picture.

The spread between the yields in 2-year and 10-year US treasury notes hit a new post-GFC low after the speech.

The money is flooding into short-term bonds on the back of the conviction the Fed has at least one, if not two, hikes on the way this year.

A lot of that money is coming from emerging markets. That wave of capital is behind the ever-upward trend of the US dollar against nearly every currency on the planet.

Only the Mexican peso, Kenyan shilling, Japanese yen and Ukrainian hryvnia are putting up much resistance to the Greenback's global hegemony.

The commodity sensitive Australian dollar has been hit harder than most.

Are US bonds pointing to recession?

The money coming in for longer-term notes, holding down yields and flattening the interest rate curve is worth more than a cursory glance.

It has been by the safe haven attraction of US 10-year bonds and worries about the impacts a trade war would have on emerging economies that kept the yield down.

A flat yield curve — where short and long-term rates are roughly the same — in the bond markets is not exactly a vote of confidence in the future.

It is saying that rates may not need to rise that much in the years ahead as economic prospects are not that bright.

An inverted curve — where short term rates are higher than long-term rates — is more worrying.

It is a bleaker view of the future and has a reasonable record at indicating a recession down the track.

Capital Economics' John Higgins said an inversion in the US treasury yield curve is probably now just a matter of time.

Mr Higgins said he expects the gap between short and long-term rates will continue to shrink, but that isn't necessarily a cause for alarm, yet.

"In the Fed's last three major tightening cycles, the spread had fallen towards, or even below, zero at the point of the final rate hike."

So what will unwind the inverted yield-curve? Well, the need to cut rates if things come unstuck again.

"It could turn positive again if, as we expect, the Fed gears up for rate cuts in 2020 in the face of a sharp economic slowdown," Mr Higgins said.

Mr Trump may be less thrilled with that outcome

Longest bull market?

Wall Street in the meantime marches higher.

It hit a new record by Friday's close, regaining all the ground lost in February's correction, and in doing so may have nailed a new record for the longest bull-run — depending on your definition.

AMP capital's Shane Oliver said where a bull market starts comes down to the definition of the bear market that immediately preceded the run.

"If it's just a 20 per cent fall then the last record bull market started in October 1990 and ended in March 2000 and so the current bull market that started in March 2009 is now longer," Dr Oliver said.

"But I tend to see a bear market as a 20 per cent fall that's not reversed within a year and on this basis 1990 was not a bear market as the fall was quickly reversed and as such the record started in December 1987 and ran to March 2000 and it's still a long way from being surpassed.

"Alternatively, if the 1990 US share market fall is a bear market then the share market slump of 2011 which saw US shares fall 19.4 per cent [a near bear] on a daily closing basis but 21.6 per cent on an intraday basis should be treated as a bear market too in which case the current bull market is still a long way from any record.

"It's all semantics really as history tells us that 'bull markets don't die of old age but exhaustion'," he observed.

ASX gets the wobbles

While Wall Street's S&P500 powered to a new high on Friday, the ASX limped over the line — down 1.5 per cent, or around $30 billion, for the week.

After starting the week at a decade high, it ended with a whimper, according to Citi's director of equity sales, Karen Jorritsma.

"The leadership spill rattled the banks and kept trading choppy this week," Ms Jorritsma said.

The market's positive response to the start of the August reporting season seems a long time ago now.

"We are now 90 per cent of the way through by market cap, and we have continued to see the majority [65 per cent] of results coming in-line with expectations while the hits and misses were nearly equally weighted," Ms Jorritsma said.

The big theme of the week was Australia's very own tech rally, spurred on by the fact nearly everyone in the market was short in the sector.

Apart from Telstra bouncing out of its pit of despair, there were big rises from the likes of relative unknowns such as logistics software business Wisetech, voice recognition developer Appen, and Altium, a circuit board designer.

Despite the three small-cap tech stocks all being sold off heavily on Friday, they all still ended the week well ahead.

"These names had a stellar run this week with Telstra putting on 8 per cent and now nearly 20 per cent for the month," Ms Jorritsma said.

"The tech small caps left us breathless with Wisetech leading the charge, putting on a whopping 52 per cent during the week, followed by Altium adding 37 per cent and then Appen putting on 30 per cent."

Another big theme is the re-emergence of cost pressures across a number of sectors.

"Cost inflation was a common theme across results with labour, transport, energy and raw material prices pinching corporate margins," Ms Jorritsma said.

The big miners BHP, Newcrest and S32 we feeling the pinch too.

"Rising cost pressures aren't enough to take the gloss of the power of strong spot commodity prices however and we retain the bullish view on the sector."

Despite the setback, the ASX has still outperformed Wall Street since its previous peak, but the gap may be narrowing.

Does political dysfunction even matter to business?

The obvious question of the week for business is: does political in-fighting, when ramped up to a Federal Government tearing itself apart, have a big impact on the commercial world?

ANZ has looked and found while consumers after often surprised and dismayed by the toppling of prime ministers, business isn't — largely because it has already a pretty low opinion of politicians.

The ANZ's weekly consumer confidence survey was hit last week, and that was even before the Liberals' leadership spill was announced.

If history is a guide, it will have little impact on equivalent business surveys.

"As far as business sentiment is concerned, there is no clear link between politics and the more important measure of business conditions," ANZ's Felicity Emmett said.

"What's more, we think after a decade of political volatility businesses have very low expectations about goings on in Canberra.

"So we don't think it inevitable that this week's events will have a measurable impact on the economy, but we will certainly be watching for evidence to contrary."

While political instability worries consumers, business appears to have a more a "whatever" attitude. ( Supplied: ANZ )

Business investment back in focus

After last week's better-than-expected construction work figures, Capital Expenditure (Capex) will this week be the next big building block to be put in place for second quarter GDP result.

The Bureau of Statistics' Capex survey has two important components — the investment by private enterprise in the three months to July and an estimate for spending in the year ahead.

Having been a dead weight on economic growth for a couple of years after the mining construction boom rolled over, there are signs Capex is picking up.

While mining investment may still be a slight negative, it won't be too bad and there are signs that the big resources companies are starting to spend again.

A pick-up in non-mining construction work in infrastructure and commercial building should see overall Capex grow by 0.8 per cent over the quarter, compared to the 0.4 per cent growth in the first three months of the year.

The important forward looking estimate forecast for 2018/19 is expected to rise from $88 billion to $105 billion as businesses feel more confident to approve future work.

This week will also provide an insight into future residential construction with the release of July building approvals (Thursday).

The June figures were propped up by an outsized contribution from Queensland apartment permits that is unlikely to be repeated this time.

If current trends hold, a decline in apartment approvals should outweigh a modest growth in plans for new houses.

The Reserve Bank's monthly credit data (Friday) is likely to continue along the recent theme of investor lending holding back overall credit growth.

Australia

Date Event Comment Monday 27/08/2018 Tuesday 28/08/2018 Caltex interim results First half profit likely to slide around 5pc to $280m Wednesday 29/08/2018 Boral FY results A 50pc increase in profit to $500m forecast. Looking for news on on US issues and infrastructure spending in Australia New home sales Jul: HIA series. Slowed substantially from a year ago Thursday 30/08/2018 Perpetual FY result Fairly profit around $140m forecast Ramsay Healthcare FY result Profit likely to rise about 5pc to $570m, but conditions tougher in hospitals globally Private capex Q2: Still looking for broad recovery from mining lump. 0.9pc QOQ rise expected or 3.5pc YOY Building approvals Jul: ABS series. May retrace June's bounce which was driven by a surprise increase in Queensland Friday 31/08/2018 Harvey Norman FY results FY profit tipped to be down around 20pc to $350m on falling sales and a margin squeeze Private Sector credit Jul: RBA series. Growth has eased, particularly for investor housing. Probably a fairly flat result

Overseas