This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Traders will be watching out for them given current market themes.
What Fed Janet Yellen says or doesn’t say tonight at the Jackson Hole symposium would influence the financial markets next week. The main point is whether she is on the same hawkish page as her second-in-command, Stanley Fischer. If she is hawkish, then we could see dollar bulls come out in droves, albeit cautiously, as they look ahead to next Friday’s payrolls data. The consensus estimate is for an addition of 180,000 jobs in August, down from 255,000 in July.
After the forward-looking durable goods orders provided some optimism about business confidence, investors would want to keep an eye on the US labour market to assess the likelihood of further rate hikes. This is especially pertinent if Yellen asserts tonight that the Fed will continue tightening policy this year.
A number of Fed officials will be speaking next week, including Eric Rosengern (voter), Loretta Mester (voter), Neel Kashkari (non-voter) and Jeffrey Lacker (non-voter).
Purchasing Manager Index (PMI)
The monthly round of private sector manufacturing PMIs will be due next Thursday, 1 September. The focus is on China, where the official NBS PMI will be released before the Caixin-Markit PMI. Economists are expecting a slight contraction in August at 49.9 for the official PMI, and a slight expansion at 50.2 for the Caixin PMI.
The mixed picture between the two PMI results gave an overall impression that the China’s manufacturing activity continues to stabilise, supported by state stimulus. That there is no rebound in sight is the underlying message. As long as the manufacturing sector is not deteriorating markedly, Beijing is probably content to keep its stimulus in place, without adding further support.
Investors would be also interested in Japan’s PMI, as well as other high-frequency data, including industrial production, capital spending, and retail sales.
In Asia, onshore markets in Philippines will be closed on 29 August, Malaysia on 31 August, and Vietnam on 2 September.