Friday, August 22, 2014

Main Points for today

•     Dollar weaker all around despite excellent economic news
–    All yesterday’s US indicators were better than expected and better than the previous month:  existing home sales, Markit manufacturing PMI, Phili Fed index, jobless claims
–    USD weakness must therefore have been in anticipation of dovish comments at today’s Jackson Hole seminar
–    I see USD weakness as only temporary
•     NOK is biggest gainer
–    Mainland economy expanded 1.2% qoq in Q2, much higher than expected
–    Strong growth, high inflation, low unemployment make for a hawkish background to Sep. 18th Monetary Policy Report = NOK to remain underpinned
•     Today:
–    Canada: CPI for July expected to slow, retail sales for June expected to decelerate = CAD-negative
US: Fed Chair Yellen gives the keynote speech at the Jackson Hole seminar for central bankers. The market expects dovish comments on the continuing problems of the labor market, therefore the risk is that her comments are more hawkish than expected. ECB President Draghi also speaks

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