Next week's key event is the Jackson Hole symposium. Federal Reserve members should not reveal anything dramatic according to analysts from Danske Bank. Economic reports includes Markit PMI.
Key Quotes:
“In the US, the Markit PMIs for both manufacturing and service are due for release. In July, manufacturing PMI took a large jump to 53.3, up from 52.0 in June, ending a fivemonth streak of declines. We expect the August figure to remain around the 53.3 level. Service PMIs have shown a rising trend over the past four months, climbing from 52.8 in March to 54.7 in July. We expect the August figure to continue upwards to 55.0.”
“A key event for markets next week is the annual Jackson Hole Symposium, with speeches by central bank governors, academics and financial market participants. This year’s title is ‘Fostering a Dynamic Global Economy’. The programme is not public yet but we know ECB President Mario Draghi will be among the speakers. With regard to Fed signals, we do not expect anything dramatic. This week’s minutes from the latest FOMC meeting confirmed that the Fed will make an announcement on balance sheet reduction relatively soon. Any signals at Jackson Hole are likely to mirror comments earlier this week by Vice-President Bill Dudley (voting, dove), who is at the centre of decision making by the Board. He said, ‘I would be in favour of another rate hike this year’ if the economy holds up. On the balance sheet reduction, he said, ‘In the last FOMC statement, we said that we expected this to happen relatively soon. So, I expect it to happen relatively soon.’”
“Core capex goods orders for July are due on Friday. In June, monthly growth was 0.0%, following 0.8% growth in May. We expect no significant movement in the August figure”.
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