Focus on Jackson Hole Symposium speeches by Yellen and Draghi

Notes/Observations

- All eyes on central bank speak at Jackson Hole Symposium; pits hawkish-sounding Fed against dovish ECB

- Russian aid convey inside Ukraine without govt permission or Red Cross escort

Key Economic Data in session

- (UK) Retailer John Lewis reports weekly LFL Partnership sales for week ending Aug 15th: +9.1% v 7.0% prior

- (EU) ECB €4.0M borrowed in overnight loan facility vs. €19.0M prior; €23.5B parked in deposit facility vs. €18.4B prior - Daily Eurosystem Liquidity Conditions Stats

- (NL) Netherlands Jun Consumer Spending Y/Y: 0.0% v 0.0% prior

- (CN) Shanghai Futures Exchange (SHFE) Weekly Copper Stockpiles: 86.6K v 96.9K prior

Fixed Income

- (IN) India sold total INR120B vs. INR120B indicated in 2020, 2028, 2030 and 2042 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

***Equities***

Indices [Stoxx50 -0.4%, FTSE 100 flat at 6,777, DAX -0.3% at 9,377, CAC-40 -0.6% at 4,269, IBEX-35 -0.2% at 10,503, FTSE MIB -0.3% at 19,950, SMI -0.1% at 8,559, S&P 500 Futures flat 1,990]

- Market Focal Points/Key Themes: European equity markets have drifted slightly lower since the open in benign trading ahead of separate Jackson Hole speeches from US fed chief Yellen and ECB chief Draghi later today. Banks are leaders to the upside on hopes of dovish comments from both Central bankers. Traders also have a cautious eye on the Russia humanitarian convoy that has begun moving from the Ukraine/Russian border to Lukansk without Ukraine approval. S&P 500 Futures remain bid as a recent melt-up in US markets threatens to push futures through the psychological 2,000 level.

By Sector

- Healthcare [AZN.UK +0.8% (follow-on chatter of PFE bid)]

- Financials [LSE.UK -0.7% (rights issue)]

- Consumer Discretionary [BBED.NL +0.5% (sees positive trends in earnings), HFD.UK -2.8% (Broker downgrade)]

- Industrials [PEABB.SE -4.0% (reports op profit v y/y loss), ARCAD.NL -1.7% (Nippon Koei UK Topco notes company's increased offer for Hyder Consulting), BHY.UK +6.1% (earnings beat)]

- Telecom [VOD.UK +0.8% (renewed chatter of AT&T bid)]

Speakers

- Russia says aid convoy began moving towards Luhansk and warned against all efforts to halt the humanitarian mission. Russia called on Ukraine, US and EU for political talks (**Note: Reports circulating that convoy was accompanied by small group of pro-Russian separatists but not accompanied by the Red Cross)

- South Korea Fin Min Choi: 2015 budget to be expansionary and the fiscal deficit to be larger than 2014

- India Central Bank (RBI) released new liquidity management plan which adjusted bank's borrowing capacity under Marginal Standing Facility

- India govt said to have raised sugar import duty from 15% to 25%

- China Premier Li Keqiang reiterated that domestic economy faces challenges keeping growth

Currencies/Fixed Income:

- FX markets were on hold with USD just off its 2014 peak against a basket of major currencies ahead of the Fed's Jackson Hole conference. Markets are still weighing up the implications of the minutes of the last MPC and FOMC meetings. Position squaring seemed to be the main objective among traders who had long dollar positions into the Fed conference.

- The USD could slip if Yellen sounded dovish, but any fall was likely to be mild with ECB's Draghi situation

Political/In the Papers:

- (US) Fed's Williams (dove, FOMC non-voter): 1st rate hike in summer of 2015 is a reasonable guess, is a personal view but ultimately the 1st hike will be data dependent

- (US) Fed's Plosser (hawk, FOMC voter and recent dissenter): Main concern is that monetary policy is not reacting to changing data. longer we wait, the higher the risk of having to raise rates very quickly.

- (AR) Argentina bond case judge holds hearing, demands a settlement, calls Argentina's position "lawless"

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

- (SK) Slovakia Sovereign Debt Rating Published by Fitch

- (DK) Denmark Sovereign Debt Rating Published by Fitch

- (US) Fed symposium in Jackson Hole, WY

- (ZA) South Africa to sell I/L 2022, 2025 and 2038

- 06:00 (IE) Ireland July PPI M/M: No est v 0.3% prior; Y/Y: no est v -1.7% prior

- 06:00 (EU ECB weekly 3-Year LTRO Repayment vs. €3.5Be

- 06:05 (UK) DMO to sell combined £3.5B in 1-month, 3-month and 6-month Bills

- 06:45 (US) Libor Fixing

- 07:00 (EU) EMA Releases Drug Approvals and Safety Decisions

- 07:30 (IN) India Forex Reserves w/e Aug 1st: No est v $ B prior

- 08:00 (US) Fed's Bullard on CNBC

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (CA) Canada Jun Retail Sales M/M: 0.3%e v 0.7% prior; Retail Sales Ex Auto M/M: 0.3%e v 0.1% prior

- 08:30 (CA) Canada July CPI M/M: -0.1%e v +0.1% prior; Y/Y: 2.2%e v 2.4% prior; Consumer Price Index: 125.9e v 125.9 prior

- 08:30 (CA) Canada July CPI Core M/M: 0.1%e v -0.1% prior; Y/Y: 1.9%e v 1.8% prior

- 08:30 (CA) Canada July CPI (Seasonally Adj) M/M: No est v 0.3% prior; CPI Core 9Seasonally Adj) M/M: No est v 0.2% prior

- 09:00 (MX) Mexico July Unemployment Rate NSA: 5.0%e v 4.8% prior; Unemployment Rate (Seasonally Adj): 4.8%e v 4.8% prior

- 09:00 (CL) Chile July PPI M/M: No est v -0.7% prior

- 09:30 (BR) Brazil July Current Account Balance: -$5.8Be v -$3.4B prior; Foreign Direct Investment (FDI): $5.5Be v $3.9B prior)

- 10:00 (US) Fed Chair Yellen gives key speech at Fed n Jackson Hole symposium

- 12:00 (US) Fed's Lockhart on CNBC

- 12:30 (US) ECB chief Draghi gives key speech at Fed symposium in Jackson Hole

- 15:00 (AR) Argentina July Trade Balance: $0.8Be v $1.4B prior