Jackson Hole Symposium: Eyes on Yellen, Draghi - NAB

Analysts at National Australia Bank (NAB) provide their thoughts on what they expect from the speeches by the ECB President Draghi and Fed Chair Yellen during the 2-day Jackson Hole Symposium starting later on Thursday.

Key Quotes:

“Fed chair Janet Yellen's address to the Kansas Fed's Jackson Hole symposium on Friday. She is talking on financial stability.

If she plays up the easing in financial conditions that has occurred since January, since when the Fed has raised rates twice, and highlights the risk this poses to financial stability, it could prompt something of a market reassessment, on the view that it is not just evidence of higher inflation that is going to be driving decisions on further Fed tightening.

The ECB is preparing to announce its asset purchase taper program that will start in early 2018 'in the fall'.

While markets ponder over whether that means the 7 September or 26 October meeting (we side with the former), we don't think it matters much which meeting as far as FX and yield movements are concerned.

The ECB's Minutes of its last (July) meeting show it is more aware of FX markets 'overshooting' and pushing the EUR higher.”