USD Steady Ahead Jackson Hole

In the past couple of years, central bank official heads have announced major policy changes and updates during the event.

However, markets were encouraged by the latest monthly report from Bundesbank, which was notably optimistic about Germany’s growth outlook.

“Janet Yellen will again make another effort to justify why the Fed is so keen on further rate rises when the domestic economy is so lacklustre, and her views might offer some support to the dollar”.

“While there’s not a lot of economic news to work with this Monday, there is still the continuation of some key macro-issues for investors to process”, said Connor Campbell, a financial analyst at SpreadEx. Draghi will take the podium later that day. It estimates $200-$300 billion flowed to emerging stocks and bonds annually during the peak years of the Fed’s bond buying in 2012-2013. Dallas Fed President Robert Kaplan told reporters in Lubbock, Texas, on Thursday, when asked about Jackson Hole.

The big conundrum across the developed world is the failure of inflation to accelerate as jobs growth has risen and economic growth settled back into a comfortable growth zone.

In the NY session, Canada retail sales and U.S. Federal Housing finance agency’s house price index for June are set for release.

VMWare was up about 2 percent at $98.89 after Deutsche Bank upgraded the stock to “buy” from “hold”. Prices rose just over 5% from the low seen last Thursday at 46.46, with most of the gains seen on late Friday following a decline in the Baker-Hughs weekly oil rig count. Bank of England Gov. Mark Carney plans to skip the event. If anything, that’s likely to be the signal at Jackson Hole but it’s not the kind of thing that will spark much of a market reaction.

“The most recent minutes from the Fed and European Central Bank, shows that inflationary pressures remained absent, despite declining unemployment rates”. The question on most trader’s minds is whether or not Draghi will tip his hat that tightening is around the corner, and in so doing, further fuel the euro rally, which has been a mainstay of markets in 2017.

The US June 30 earnings season has nearly exhausted itself – a few retailers such as Abercrombie and Fitch, Guess?, Dollar Tree, Burlington Stores, Tiffany, American Eagle, Lowes Cos, JCrew and Williams Sonoma are expected to report.

EUR USD Exchange Rate Forecast: German Economic Confidence to Slide?

“The euro has continued to make gains against sterling in recent months and we could see the United Kingdom currency hit an all-time low if data, such as Thursday’s latest GDP reading, comes in below par or Draghi hints at curtailing QE”. The fresh reference to the strong Euro ahead of Draghi’s speech at Jackson Hole on Friday adds to signs that the European Central Bank is remaining cautious as the strong currency already provides some degree of monetary tightening.