The long-awaited speech at Jackson Hole by Fed Chairman Janet Yellen is due today at 16:00 CET. She will speak on the Fed's 'monetary tool kit' but is also expected to give her view on the timing of a rate hike. She is not likely to be precise on the timing but will probably signal that a rate hike has come closer again with the labour market strengthening and global risks decreased.
A rising number of Fed members have signalled that they see a case for a rate hike being not too far away. Vice chairman Dudley, who is normally very dovish, said last week that an increase was up for discussion at the 21 September meeting. The other vice chairman Fischer said this week that the Fed was close to meeting its targets. Yesterday, Dallas Fed chief Kaplan said the case for a rate hike was 'strengthening' but that it should happen gradually. The market is pricing in a 32% probability of a September hike and 57% of a December hike.
Today, M3 and credit growth data is due out of the euro area. Money supply has grown on a very consistent basis around 5.0% over the past few months. More interesting to us is the growth in loans. The loan numbers will give information about whether the ECB's monetary stimulus is effective and filtering through to households and NFCs. The numbers are very important for the ECB, as it puts increasing emphasis on the condition of credit markets.
The second release of US GDP for Q2 is due to be released but should not provide much news.
In Scandi, Norway manufacturing wage index for Q2 is due out this morning.
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