Yesterday’s economic calendar was jam packed with US and German data. Firstly, German Ifo Business Climate failed to meet economists’ consensus, registering a seven-month low of 106.2. Business activity in the Eurozone powerhouse declined in July, after the shock leave vote in the EU Referendum worsened market conditions. In the afternoon, the US released Core Durable Goods Orders and Unemployment Claims. Both high tier data releases exceeded expectations. The jobless claims figures depreciated to 261k, whilst the Core Durable Goods reading registered a bullish 1.5%, as production and rising purchase orders boosted the US manufacturing sector last month.
The highly anticipated Jackson Hole Symposium begins in Wyoming today. This event will be attended by central bankers, finance ministers and financial market participants from around the world. It will be closely watched by markets for any clues into future monetary policy changes. Fed chair, Janet Yellen, will be the star of the show, as Yellen’s speech is being billed by Wall Street as must-see TV. Markets will be eager to see if Yellen will signal an interest rate hike this year and potentially in the coming month. The speech begins at 15:00 BST.
The UK’s economy comes back into the spotlight this morning as the second release of Q2’s GDP hits the wires. Although markets are expecting no change from the first reading of 0.6%, with the Brexit vote and the shift in business sentiment, it is possible that variations may be seen. In the afternoon, the focus of the markets will turn to the US where the second reading of Q2 GDP is released. The reading could possibly fall to 1.1% from the original 1.2%. Following this, the main focus will be on Fed Chair, Janet Yellen’s speech at the Jackson Hole, where all will watch to see if a rate hike is back on the table for September’s meeting.