Today’s sees the release of two GDP figures from opposite sides of the pond, the UK will see the Second Estimate GDP being released while the US will see the release of the Prelim GDP figures. Better than expected releases will benefit the respective countries economy, seeing their currency value appreciate as investors seek more of the respective currency to invest in the specific country. Worse than expected data will see the respective countries currency depreciate in value as investors run for cover as they seek to protect their assets.
The Jackson Hole Symposium, a two day, closed door event in which central bankers, finance ministers and academics gather to discuss the state of their respective economies as well as the global economy at large. Comments and speeches are expected throughout which may cause volatility in markets. We expect speeches from Fed chair Yellen and BOJ Governar Kuroda, among others, which market participants will be watching closely.
Yellen, will speak today and markets will be looking for forward guidance to the position of the FED, we will see the USD appreciate with any hawkishness, in which the probability of upcoming rate hike increases while dovishness, in which the likely hood of rate hike is diminished, will see the USD depreciate against its counter parties.
Kuroda, will speak on Saturday and as such any major comment will be priced in on market open where we could see significant gaps from Fridays close, depending on what is said. Should Kuroda flame the fire of further easing, we would see the JPY depreciate across the board while a more neutral tone would see the JPY flat to stronger against its counter parties.
Today’s key economic data:
- M3 Money Supply y/y expected at 5%
- Second Estimate GDP expected at 0.6%
- Prelim Business Investments q/q expected at -0.9%
- MPC Member Shafik Is due to speak at the Jackson Hole Symposium today
- Saturday sees BOJ Gov Kuroda Speak at the Jackson Hole Symposium, which takes place over two days.
- Prelim GDP q/q expected at 1.1%
- Revised UoM Consumer Sentiment expected at 90.6
- Fed Chair Yellen is due to speak at the Jackson Hole Symposium today.