FX traders appear to be cognizant of many unknowns related to Draghi and Yellen speeches in Jackson Hole thereby they dial back their risk appetite while the EURUSD has swung so far. For the same reason, stock investors have been cautious as well and have managed to make modest gains thus far.
Looking through G10 currencies one could notice that the SEK and NOK are among the strongest currencies. The former is gaining owing to an exceptional move seen in bond yields fueled by the rosier outlook for fiscal policy as well as a discussion on possible inflation measures adjustments. In turn, the latter is moving higher along with oil prices which are edging up mainly on the back of threats stemming from the hurricane Harvey which is approaching the US (Texas, where many refineries are based in). In effect, the front end of the curve has steepened while contango between November and October contracts on WTI has reached the highest level since June 23.
We got the IFO data from the German economy which proved to be solid with the IFO expectations indicator marking the highest level since January 2014. Therefore, it seems that an unexpected drop seen in the ZEW index, when it comes to the future assessment (6 months ahead), might be played down. This is especially true when we notice that both services and manufacturing PMIs turned out be considerably higher in August (preliminary releases) boding well for economic growth in the whole euro area.
Looking back to the Asian session, Hang Seng China Enterprises Index (CHNComp on xStation5 platform) soared for the third day in a row and is bound to see the best week since April 2016! Today’s gains were fueled by solid quarterly reports from PetroChina Co. (+4.4%) and China Life (+3.8%) as both companies presented earnings on top of estimates
Dash has been growing quite considerably over the course of recent hours and that move has been propped up by the news that Max Keiser, an American broadcaster and film maker, is going to asking Dash to contribute $500,000 towards his forthcoming TV show “The Great American Pilgrimage.” Together with Stephen Baldwin, Keiser intends to shoot 16 episodes of a road trip in which he quizzes the US public on their political motivations.
Needless to say that most of attention is on Jackson Hole today where both Janet Yellen as well as Mario Draghi are expected to deliver their statements. There undoubtedly will be pivotal events during today’s session. On top of that, there are a few macro readings worth looking at.