Markets continue to reflect the Jackson Hole

  • EUR - M3 Money Supply y/y: 4.5%
  • EUR - Private Loans y/y: 2.6%
  • USD - Good Trade Balance: -65.1B

The highly anticipated Jackson Hole symposium took place over the long weekend. ECB President Mario Draghi was expected to keep a low profile during the event and many investors had high hopes that Fed chair, Janet Yellen, would cite some clues on the timing of further US rate hikes or something specifically relevant to the Feds’ outlook on the US economy. Unfortunately, Yellen mentioned neither and fully avoided any discussion on either issue. The speech largely disappointed traders on the currency markets, with the Greenback falling lower versus all of its G-10 peers on Friday.

What’s more, Draghi did not show any concern about the current strength of the Euro. In his key speech, Draghi defended the ECB’s asset purchase programme whilst also stressing that he is confident its 2% inflation target will be achieved. As investors were reassured that there will eventually be an end, albeit a slow one, to the ECB’s asset purchase programme, this combined with strong manufacturing data out of Germany last Friday – sent the Euro higher.

Across the pond, the US released the Core Durable Goods Order, posting 0.5%; the biggest gain since February. This was helped by the steady Consumer Demand and weaker Greenback. However, the Durable Goods Order figure, which includes transportation items fell by the largest fall since August 2014 to -6.8%, from 6.5% increase the previous month. The decline was caused by the drop-in aircraft orders.

  • USD - CB Consumer Confidence
  • JPY - Unemployment Rate
  • NZD - Building Consents m/m

The economic docket is fairly light today, as the markets continue to digest Jackson Hole. The US will be releasing the CB Consumer Confidence Index, expected to post 120.09. Australia will be posting both the Building Approvals and Construction Work Done figures, whilst the Reserve Bank of New Zealand Governor, Graeme Wheeler, will be giving a speech titled ‘Reflections on the stewardship of the Reserve Bank,’ this evening.