The Pound continues to trade at lower levels against the Euro and the US Dollar ahead of a quieter week on the economic data front.
This week’s main focus will be on the Jackson Hole Symposium starting on Thursday where the world’s Central Bankers meet to talk central banking policies (among other things I’m sure) as markets wait for clues about how they intend to exit the huge stimulus packages they unleashed to dig the global economy out of the most recent financial crisis.
After a decade of low-interest rates and bond buying (aka quantitative easing), some analysts believe the Jackson Hole summit will be a good platform to convince markets they can safely wean the world off cheap money.
It may also turn out to be a non-event.
At a Jackson hole summit in 2014, Mario Draghi prepared the world for the European Central Bank’s massive bond-buying program to help rescue the Eurozone economies who were struggling from years of sovereign debt crises, however, at this year’s summit, many believe that the ECB president may signal the eventual withdrawal of their QE program. Something which may send some ripples through financial markets as it is an experiment that has never been tried. Just like the implementation of QE.
Pressure is also mounting on the US Central bank who are further ahead than most as they started raising interest rates in December 2016 amid fragile economies overseas and low lagging inflation.
A report published last week found that six central banks, the Federal Reserve, ECB, Bank of Japan, Bank of England and the Swiss and Swedish central banks, now hold more than US$ 15 Trillion of financial assets on their books as a direct result of their QE programs.
The US Fed chair, Janet Yellen, will be the first to speak at the event on Friday, followed by Mario Draghi later that day. Bank of England deputy governor, Ben Broadbent, is expected to attend but is not scheduled to speak publicly.
8.00 am – 9.00 am – French, German and Eurozone manufacturing & Services PMI’s (August, flash): Expected to have eased off this month
2.45 pm – US Manufacturing & Services PMI (August, flash): Both expected to remain at last months levels
3.00 pm – US new home sales (July)
9.30am – UK GDP (Q2, 2nd estimate): no change expected to previous estimate of 0.3% QoQ and 1.7% YoY
1.30pm – US initial jobless claims (w/e 19 August): expected to rise to 239K from 232K
3.00 pm – US existing home sales (July): expected to increase to an annual rate of 5.57 million
1.30 pm – US durable goods orders (July): expected to fall by 5.5% MoM