Doves or Hawks? All eyes on Janet Yellen and Mario Draghi as they speak at the Jackson Hole symposium

Yesterday’s markets

25th August 2017

  • GBP - Second Estimate GDP q/q: 0.3%
  • USD - Unemployment Claims: 234K
  • USD - Jackson Hole Symposium

The UK GDP Q2 data was released yesterday at the estimated 0.3. The UK’s results were the worst of its group of peers; the US, Italy, France, Euro area, Germany and Japan. These results gave an indication that the economy is slowly losing momentum. This is due to household expenditure being its lowest since 2014 and Brexit playing a significant factor. The huge levels of uncertainty are impacting individuals wiliness to invest until things are much clearer.

Today’s markets

24th August 2017

  • USD - Core Durable Goods Orders m/m
  • USD - Fed Chair Yellen Speaks
  • EUR - ECB President Draghi Speaks

The market has been focused on today’s events, all week, with Fed Chair Janet Yellen and President of the ECB Mario Draghi both speaking later today. Yellen takes to the stage at 5pm. The path of the Fed and FOMC members has been clear from the turn of this year, with two of three rate rises already actioned. However, all will be waiting to see if the Fed Chair remarks on the likelihood of another rate rise and if so, when.

The Greenback is having its worst year against its peers, as the US President fails to pass any of his intended mandates through the US government. Trumps outburst on Wednesday evening regarding the building of the border wall and subsequent shutting down of the government if it is not, has added to this. Today’s speech from Yellen will be watched closely to gauge how the Fed see the current US economy and the next steps to be taken are.

The highlight will be when ECB president Mario Draghi takes to the stage at 8pm tonight. Recent comments from the Chief of the ECB over the past month on how the Euro Zone has stabilised and growth is returning, prompted talk of the tapering of their QE programme. This has seen the Euro surge to eight year highs against the Pound and also rise to two and a half year high against the Dollar.  Markets are now hoping that Mario Draghi will provide a clear message on this this evening, although many feel he may steer clear and point to the next Central Bank meeting on September 7th for any policy changes to be discussed. As we are all awaiting to see if the speech delivered is more hawkish or more to the dovish side, there is no doubt going to be volatility as markets digest and take position.

Data being released today is on the light side with just the monthly gauge of Durable Goods released out of the US just after lunchtime today.