Daily Commentary BY THE CURVE TEAM –

Calm Ahead of Jackson Hole

22nd of August, 2017

Another very quiet night for markets as we draw closer to Friday’s main event in Jackson Hole. Faced with persistently subdued inflation globally, the key will be in the details of speeches given by US Fed Chair Janet Yellen and ECB President Mario Draghi.

With Draghi set to speak on the overarching theme “Fostering a Dynamic Global Economy”, it is unlikely we are going to be given much insight into the plans of the ECB’s asset tapering program. However, as the ECB looks to restore euro-area price stability, markets could be interested to hear what Draghi has to say in his speech in Germany before departing for Wyoming.

It is looking like Yellen will be the main focus of the symposium. Faced with the pressure of consistently subdued inflation, Yellen’s speech on financial stability could provide further insight into the unwinding of the Fed balance sheet. With December rate hikes only being priced at 30%, expressions of uncertainty around inflation could hinder the Fed’s expectations of 4 hikes by the end of 2018.

Another quiet day ahead for data, the highlight being domestic ANZ Consumer Confidence. Despite being second tier, the data could prove interesting considering the disparity we have seen between business conditions and consumer confidence of late.

Oliver Parsons

Client Relationship Officer