Looking at the week ahead, in Europe the focus will likely be on the flash August PMI readings. The readings for the Euro area, Germany and France are due on Thursday. Markets are expecting a modest 0.4pt decline for the Euro area composite PMI but we suspect plenty of focus will be on the flash manufacturing PMI reading for Germany given the softening data momentum over there. The other notable European releases this week also include the Euroarea trade balance today, UK inflation tomorrow, and German PPI on Wednesday. In the US, we will get the NAHB housing market index today, July CPI and housing permits/starts on Tuesday and the Philly Fed survey on Thursday. We will also get the latest FOMC and BoE's meeting minutes on Wednesday. In Asia, the focus will be on China's HSBC flash manufacturing PMI for August on Thursday. Still, all eyes (and minds) will be on Jackson Hole this week.
However, the main event of the week will be Yellen's long awaited speech at the Jackson Hole 3-day symposium taking place August 21-23. The theme of this year's symposium is entitled "Re-Evaluating Labour Market Dynamics" and Yellen is expected to deliver her keynote address on Friday morning US time. Consensus is that she will likely highlight that the alternative measures of labour market slack in evaluating the ongoing significant under-utilisation of labour resources (eg, duration of employment, quit rate in JOLTS data) have yet to normalise relative to 2002-2007 levels. Any sound bite that touches on the debate of cyclical versus structural drivers of labour force participation will also be closely followed. Unlike some of the previous Jackson Hole symposiums, this is probably not one that will serve as a precursor of any monetary policy changes but the tone of Yellen's speech may still have a market impact and set the mood for busier times ahead in September.
Interestingly Mario Draghi will also be attending this time and is expected to deliver a luncheon speech at 12.30pm local time on the same day. Other participants at the symposium also include BoJ’s Governor Mr. Kuroda, Central Bank of Brazil’s Governor Mr. Tombini and BoE’s Deputy Governor Mr. Broadbent.
Summary of the key events: