JANET YELLEN TO ADDRESS JACKSON HOLE
The annual Jackson Hole Symposium is once again the centre of attention on Friday, with Federal Reserve Chairwoman Janet Yellen scheduled to deliver a speech on financial stability.
Although economists aren’t expecting much news from Yellen’s speech, it will nevertheless generate plenty of discussion amid speculation that President Donald Trump is looking to replace her. With Yellen’s four-year term set to expire in February, the Commander-In-Chief is said to be considering multiple candidates to head the all-powerful Fed. Various reports indicate that Gary Cohn, director of the National Economic Council, is the favourite.
Yellen will deliver her speech at 14:00 GMT.
Five hours later, European Central Bank (ECB) President Mario Draghi will deliver a speech to Jackson Hole. Like Yellen, the ECB head is not expected to unveil any new information.
Investors can also expect a steady stream of economic data throughout the day. Action begins at 06:00 GMT with revised German GDP data. The German economy is forecast to grow 0.6% in the second quarter, matching the initial estimate.
Later in the session, the CESifo Group will release its business sentiment indicators covering current conditions, expectations and the overall business climate. All three indicators are forecast to ease in August.
The start of New York trading features a high-profile report on US durable goods orders. Orders for manufactured goods meant to last three years or more are forecast to plunge 6% in July, partially offsetting the previous month’s gain of 6.5%. Excluding transportation, orders are expected to climb 0.4%.
Energy traders will also be keeping tabs on weekly rig-count data courtesy of Baker Hughes Inc. The report is widely regarded as a proxy for the US shale industry.
The Japanese yen was little changed versus the dollar on Friday, as investors digested the latest batch of inflation data from Tokyo. Japan’s national consumer price index (CPI) rose 0.4% annually in July. So-called core inflation, which strips away volatile food prices, climbed 0.5% annually. The USD/JPY exchange rate was trading at 109.60. Prices are trading well below the 100-day and 200-day SMAs, based on the 4-hour interval.
The EUR/USD was little changed on Friday, as prices clung on to the 1.18 level. The pair could generate volatility between Yellen and Draghi. At the time of writing, the EUR/USD faces immediate support at 1.1770. On the opposite side of the ledger, resistance is seen at 1.1825.
Oil prices traded higher on Friday following a highly volatile week in the market. West Texas Intermediate (WTI) was up 0.7% at $47.76 a barrel during the Asian session. Despite the increase, the outlook on crude remains neutral, based on hourly readings of the RSI and MACD indicators.