Jackson Hole


August is the quietest month. Traders are on holiday and volumes are thin. In this environment it’s all eyes on Jackson Hole for the annual gathering of central bankers and economists.

Last time they got together in Portugal earlier in the summer there appeared to be a degree of coordinated hawkishness, but has this survived?

In Jackson Hole there are two big questions that traders will want answers to. First, how close is the European Central Bank to dialling back stimulus. In July president Mario Draghi said the Governing Council is likely to discuss tapering in the autumn. What he wasn’t clear about was whether the next meeting in September counts as the autumn.  The euro, which has ripped higher as markets seem to be front-running ECB tapering, could be left exposed to any dovish sentiment.

Second, will the Federal Reserve hike again this year. The most recent FOMC projections say it will, but the market has turned increasingly sceptical. Bearish bets on the dollar have risen and the odds of a third hike in 2017 have declined as weaker inflation readings temper any bullishness from the strong labour market.  Nevertheless New York Fed president William Dudley recently reaffirmed his view that another increase would be appropriate if the economy “evolves in line with [his] expectations”.

UK GDP reading


The second estimate of UK GDP in Q2 is out on Thursday. The first reading came in at a fairly lacklustre 0.3%. This was up from 0.2% in the first quarter but yearn-year growth has slowed to 1.7% from 2%. There are not too many hopes of an upwards revision.

While growth is anaemic, sterling has come under renewed pressure in the last few days with inflation losing momentum, which seems to have curtailed any immediate need for the Bank of England to raise rates.

BHP results

Among a paucity of company results, the highlights are a couple of the FTSE’s mining giants – Antofagasta and BHP Billiton, which are both due to report on Tuesday.

For BHP, rising iron ore prices and output has lifted the share price but run-ins with investors, notably activist fund Elliott Advisers, over plans to spend more on its US shale asserts and enter a potentially lucrative fertiliser market means it's not all plain sailing. This month the world’s biggest miner also announced plans to place itself at the heart of the electric car battery market.


Eurozone PMIs


Purchasing mangers’ indices (PMIs) for the Eurozone are due on Wednesday. The surveys of the manufacturing and services sectors for August will provide an outline of GDP growth in Q3. With signs of the recovery in Europe becoming more sustained, there is growing pressure on the ECB to look at reducing stimulus. Another strong performance is expected.


Economic Calendar

(All times BST)

Monday, 21 August

Tentative – US mortgage delinquencies expected this week

00:01 – UK Rightmove house price index

09:30 – UK public sector net borrowing

13:30 – Canada wholesale sales

Tuesday, 22 August

10:00 – German ZEW economic sentiment

13:30 – Canada retail sales and core retail sales

15:00 – Richmond manufacturing index

Wednesday, 23 August

Tentative – UK inflation report hearings

01:30 – Japan flash manufacturing PMI

08:00 – French flash manufacturing & services PMIs

08:30 – German flash manufacturing & services PMIs

09:00 – Eurozone flash manufacturing & services PMIs

14:45 – US flash manufacturing & services PMIs

15:00 – US new home sales

15:30 – US crude oil inventories

Thursday, 24 August

09:30 – UK second estimate Q2 GDP, preliminary business investment, mortgage approvals

13:30 – US weekly unemployment claims

15:00 – US existing home sales

All day – Jackson Hole Symposium (day 1)

Friday, 25 August

00:30 – Japan national core CPI, Tokyo core CPI

07:00 – German final Q2 GDP

09:00 – German Ifo business climate

13:30 – US core durable goods orders

15:00 – Revised University of Michigan consumer sentiment

All day – Jackson Hole Symposium (day 2)

Saturday, 26 August

All day – Jackson Hole Symposium (day 3)

Corporate Calendar


Tuesday, 22 August

Hewlett Packard Enterprise Co (HPE) – Q3/2017, EPS estimate 0.257

BHP Billiton (BLT) - final results

Antofagasta (ANTO) – interim results

Persimmon (PSN) – interim results

Wednesday, 23 August

HP Inc (HPQ) – Q3/2017, EPS estimate 0.422

Carillion (CLLN) – interim results

Costain Group (COST) – interim results

WPP (WPP) – interim results

Thursday, 24 August

Tiffany & Co (TIF) – Q2/2018, EPS estimate 0.866

CRH (CRH) – interim results

Premier Oil (PMO) – interim results

Source: Bloomberg

or LOGIN as existing customer

Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.