Jackson Hole: Draghi and Yellen to steal the show – Rabobank

In view of analysts at Rabobank, Jackson Hole symposium may prove a non-event for the markets with focus primarily on speeches from Draghi and Yellen.

Key Quotes

“ECB President Mario Draghi will deliver a keynote speech at 09:25CET at the 6th Lindau Meeting on Economic Sciences. While Draghi’s words will be closely scrutinised, the markets may end up disappointed as it seems unlikely that Draghi will provide any specific clues about the monetary policy. Even the eagerly anticipating Jackson Hole symposium may prove a non-event for the markets. An article published recently by Reuters suggested that Draghi will stick to the theme of the conference of fostering dynamic global economy rather than pre-announce an upcoming shift in the ECB’s policy.” 

“At least some market participants will be also waiting for remarks from Janet Yellen on Friday. Dovish comments will underpin market expectations that the Fed may not raise rates further this year. Even if Yellen actually sounds hawkish, will the markets buy into that? The implied probability that the Fed will end this year with a Christmas hike in December is fairly low at 33.6% with focus on President Trump’s next step rather than comments from Fed officials.”

“Fresh set of preliminary PMIs for the Eurozone and some individual countries will be released this morning in the Eurozone. The pace of expansion in the Eurozone manufacturing sector is expected to remain solid at 56.3 in August, which would be only marginally lower than 56.6 in July. The Services PMI is seen at 55.4 and the Composite Index at 55.5, down from 55.7 previously.”