Article / 22 August 2014 at 6:34 GMT

Market Preview: Traders focus on central bank talks at Jackson Hole

Saxo Capital Markets UK
United Kingdom
  • Traders await guidance from Fed's Yellen and ECB's Draghi at Jackson Hole talks
  • UK stocks to open weaker; Asian markets trading mostly higher
  • Philadelphia Fed president Charles Plosser warns against delay in raising rates

Forex Overnight: USD trading lower
Currencies Intraday








Source: Bloomberg

The USD is trading weaker against its major counterparts this morning. With a light global economic calendar today, traders are looking forward to the US Federal Reserve Bank chair, Janet Yellen’s speech at the Jackson Hole Symposium – especially in light of the recently released Fed minutes, which failed to provide any concrete insight into the Fed’s policy outlook.

In a noteworthy event yesterday, Fed policymakers, Esther George and Charles Plosser, urged the central bank to lift interest rates sooner. Against a backdrop of the latest batch of soft Eurozone economic data, especially consumer prices and the gross domestic product data, traders eagerly await the European Central Bank president, Mario Draghi’s speech in Jackson Hole for further clues on the ECB’s future policy actions. 

At 05:00 GMT, the EUR and the GBP had advanced marginally against the USD to trade at $1.3286 and $1.6586, respectively.

The JPY had risen 0.1% each against the USD and the EUR. Later today, the Bank of Japan governor, Haruhiko Kuroda, will discuss monetary policy at Jackson Hole.


UK Stocks: Expected to open in negative territory
FTSE 100








Source: Bloomberg

The FTSE 100 is likely to open two points in the red.

No key economic indicators are scheduled for release today.

Polyus Gold International (PGIL), Bank of Georgia Holdings (BGEO), Hellermanntyton Group (HTY), Henry Boot (BHY) and Highcroft Investments (HCFT) are scheduled to report their results today.

According to Bloomberg, a Texas federal judge has dismissed a $256 billion lawsuit filed by Kenneth Abbott, a former BP contractor, and Food & Water Watch, an environmental group, against BP (BP/) alleging that the company’s oil production platform in the Gulf of Mexico did not meet safety requirements.

RSA Insurance Group (RSA) indicated that it has reached an agreement to sell its insurance business in Singapore and Hong Kong to Allied World Assurance Company in a cash deal worth GBP 130 million.


Asia: Trading mostly higher
Nikkei 225








Source: Bloomberg

Asian markets are trading mostly firmer this morning, mirroring overnight gains on Wall Street.

In Japan, Japan Steel Works (5631) declined after a broker projected that the company would miss its full-year target for operating profit and orders. However, GungHo Online Entertainment (3765) advanced amid reports that its parent, SoftBank (9984), is mulling over acquiring the company’s stake in a Finnish online game developer. At 05:00 GMT, the Nikkei 225 index dropped 0.2% to trade at 15,554.2.

In South Korea, Korea Electric Power (015760) jumped as the company revealed its decision to sell stocks and real estate in an effort to cut its debt. In China, Midea Group (000333) added value after it reported a sharp rise in its first-half year profit while Hangzhou Hikvision Digital Technology (002415) advanced among technology sector stocks. 

In Hong Kong, China Rongsheng Heavy Industries Group Holdings (1101) rallied on news that the company has agreed to acquire a stake in Kyrgyzstan oilfields. However, Li & Fung (494) slid after it indicated that conditions in key markets remain challenging.


US Stocks: Futures trading firmer
S&P 500








Source: Bloomberg

At 05:00 GMT, S&P 500 futures are trading one point stronger.

No key economic indicators are scheduled for release today. However, market participants will keep a tab on Fed chair Janet Yellen’s speech at the Jackson Hole Symposium later today.

Foot Locker (FL), ANN (ANN) and Hibbett Sports (HIBB) are scheduled to announce results today.

In the after-hours trading session yesterday, Gap (GPS) added 0.7% after it posted better-than-expected second-quarter earnings. Ross Stores (ROST) and GameStop (GME) jumped 6.4% and 5.1%, respectively, as their second-quarter earnings and revenue topped analysts’ expectations. However, Home Depot (HD) eased 0.1% following its announcement that the president, Craig Menear, would replace Frank Blake as the chief executive officer while the latter would continue to remain as the chairman. 

Aeropostale (ARO) tumbled 7.2% as the company projected a more-than-expected loss in the third quarter. Intuit (INTU) lost 1% after it reported an unexpected adjusted loss in the fourth quarter.

Yesterday, the S&P 500 index advanced 0.3% to close at a record high in the regular trading session as a batch of upbeat US economic data buoyed investors’ sentiment. Hewlett-Packard (HPQ) jumped 5.4% after the company posted its first quarterly sales growth in 12 quarters. eBay (EBAY) climbed 4.7% after a report indicated that the company might spin-off its PayPal payment unit as soon as next year. 

Bank of America (BAC) advanced 4.1% following reports that the company has agreed to pay $16.7 billion to settle the US government’s allegations of selling high-risk mortgage securities before the financial crisis. Among other financial stocks, Citigroup (C) and SunTrust Banks (STI) added 2.6% and 2.5%, respectively. Hormel Foods (HRL) rose 4.3% after it posted a rise in its third-quarter earnings. 

On the downside, Dollar Tree (DLTR) declined 1.3% after the company posted a weaker-than-expected second-quarter adjusted profit and lowered the upper end of its full-year earnings forecast. Family Dollar Stores (FDO) and Dollar General (DG) fell 0.5% and 0.2%, respectively.


Europe Stocks: Likely to open in the red
EU Stoxx 50








Source: Bloomberg

The DAX and the CAC are expected to open five points and three points lower, respectively.

No key economic indicators are scheduled for release today. Meanwhile, ECB president Mario Draghi is scheduled to speak at the Jackson Hole Symposium.

Foyer SA (FOY), Dr Hoenle AG (HNL), SM Wirtschaftsberatungs AG (SMWN), Beter Bed Holding NV (BBED), Elos AB (ELOSB), Gurit Holding AG (GUR) and Mobilezone Holding AG (MOB) are scheduled to report results today.

Bangkok Post has reported that Mercedes-Benz (Thailand), a unit of Daimler AG’s (DAI) Mercedes-Benz, is mulling over whether to produce compact and hybrid cars for the local market.

Software AG (SOW) has appointed Eric Duffaut as the chief customer officer and as a member of its executive board, with effect from October 1, 2014.


Macro Update

Fed’s Plosser warns of gloomy outcomes from current ultra-easy policy

The Philadelphia Fed president, Charles Plosser, in a media interview, has urged the Fed to avoid waiting too long to hike interest rates as he feels that a continuation of ultra-easy monetary policy for a longer time is risky and might lead to another financial crisis or could spur inflation in the economy.


Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus

Previous

Frequency

Canada

12:30

Retail Sales ex Autos (MoM) (Jun)

Low

0.30%

0.10%

Monthly

Canada

12:30

Consumer Price Index - Core s.a. (MoM) (Jul)

Medium

-

0.20%

Monthly

Canada

12:30

Bank of Canada Consumer Price Index Core (MoM) (Jul)

Medium

0.10%

-0.10%

Monthly

Canada

12:30

Retail Sales (MoM) (Jun)

Medium

0.30%

0.70%

Monthly

Canada

12:30

Bank of Canada Consumer Price Index Core (YoY) (Jul)

High

1.90%

1.80%

Monthly

Canada

12:30

Consumer Price Index (MoM) (Jul)

Medium

-0.10%

0.10%

Monthly

Canada

12:30

Consumer Price Index (YoY) (Jul)

High

2.20%

2.40%

Monthly

Canada

12:30

Consumer Price Index s.a. (MoM) (Jul)

Medium

-

0.30%

Monthly

Canada

12:30

Consumer Price Index (Jul)

Medium

125.90

125.90

Monthly

US

14:00

Fed's Yellen Speaks On Labor Markets in Jackson Hole, Wyoming

High

-

-

-


-

BoJ's Kuroda and BoE's Broadbent Discuss Labor Markets and Monetary Policy at Fed Jackson Hole Symposium

High

-

-

-

Eurozone

18:30

ECB President Draghi Speaks at Fed Jackson Hole Symposium

High

-

-

-

US

-

Jackson Hole Symposium

High

-

-

-



See today's events updated in real-time in our Financial Calendar on TradingFloor.com



Corporate Calendar


Country

Company Name

Index

Announcement

UK

AGA Rangemaster Group Plc

FTSE All Share

Interim

UK

Bank of Georgia Holdings Plc

FTSE All Share

Interim

UK

Hellermanntyton Group Plc

FTSE All Share

Interim

UK

Henry Boot Plc

FTSE All Share

Interim


– Edited by Gayle Bryant

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Show latest activity
Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail