Global markets calm ahead of Jackson Hole meeting

Sunday, 27 Aug, 2017

In her speech, Yellen looked back at the crisis-now almost a decade in our sights, offering insight into the lessons learned, the reforms made, and the impact both of these have on the financial markets of today.

At home, the Footsie rose yesterday, adding 24.41 points to close 0.33 percent higher at 7,407.06, helped by Provident Financial (LON:PFG) and WPP (LON:WPP), whose shares recovered following hefty selloffs earlier in the week.

A weak dollar is considered mostly positive for USA stocks because it boosts profits for multinationals and lowers the cost of U.S. exports.

OIL: Benchmark U.S. crude lost 2 cents to $47.67 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, the worldwide standard, slipped 35 cents to $51.53 per barrel in London.

Focus will be on the policymakers' remark at the Jackson Hole Symposium today with the main spotlight on Yellen's speech at 12:00 p.m. ET and Draghi's speech at 3:00 p.m. ET.

The euro, meanwhile, jumped more than 1 percent after European Central Bank President Mario Draghi, speaking after Yellen, did not talk down the euro zone single currency's strength as some investors had speculated.

The US dollar index fell almost 50 points in the wake of the speech text having been released, to be quoted at month long low of 92.80, while the EUR/USD exchange rate surged almost 70 points to reach 1.1860.

Asian stock markets were mixed yesterday as worries about the United States political uncertainty resurfaced while investors were waiting for the upcoming speeches by the world's top central bankers in Jackson Hole, Wyoming.

CURRENCIES: The dollar rose to 109.37 yen from 109.04 yen. Based on the figure for August, the business climate in Germany is better than expectations (115.9 versus the forecasted level of 115.5).

Reports on consumer confidence, personal income and spending, pending home sales, and manufacturing activity may also attract attention. Durable goods orders are scheduled for 8:30am and are expected to grow 0.4% ex-transportation. Toyota Motor Corp gained 1.1 percent, Honda Motor Co rose 0.7 percent and Advantest Corp climbed 1.0 percent.

The euro was flat at $1.1804, after climbing on Wednesday on surveys that showed German and French manufacturing and services were expanding. WTI was last trading at $47.84 a barrel and Brent crude was at $52.41.

"She is sort of putting a stake in the ground here in terms of this regulation issue, which is the one sort of sticking point between her and Trump right now", said Phil Orlando, chief equity market strategist at Federated Investors in NY.