Steen Jakobsen
The Bank of Japan has abandoned quantitative easing and the European Central Bank may taper its bond-buying programme, so what is the role of central banks in 2017, asks Saxo Bank’s chief economist Steen Jakobsen.
Article / 25 August 2016 at 7:03 GMT

Morning Markets: Sideways, waiting for input

Deputy Editor /



  • Germany: Ifo Business Climate Index (0800 GMT) 
  • US: Durable Goods Orders (1230 GMT) 
  • US: Initial Jobless Claims (1230 GMT)

Asian currencies moved sideways and equities traded gently lower in a lacklustre overnight session as investors awaited Friday's keynote address in Jackson Hole by Janet Yellen, chair of the US Federal Reserve. The schedule of the annual symposium and the precise timing of Yellen's appearance has yet to be made public but will be announced "at the start of the event’s opening dinner at 6 p.m., Mountain Time", the Kansas City Fed said in a statement. For those of us not attending the jamboree to rub shoulders with the world's central bankers, that's GMT-6.

But despite widespread eagerness to hear any pointers on future Fed policy it's a moot point whether or not Yellen will actually say anything substantial – she didn't even turn up at the event last year and she's known to be reluctant to be too explicit at such times, preferring to keep her options wide open on a possible interest rate hike next month. 

Elsewhere, the dollar was slightly firmer against other major currencies while crude oil edged lower, pressured both by the greenback's resilience and unexpectedly large API inventories. Gold, also priced in the US currency, suffered too, with both Brent and WTI falling further away from the key $50/barrel price it last hit one week ago. 

Finally, keep an eye on Apple and other US tech giants today following a sharp escalation in the corporate tax row between the US and the European Union. In a frank and possibly unprecedented statement, the US Treasury caustically warned that the EU was turning into a “supranational tax authority” that threatened international agreements on tax reform. 

Market signals

Asian session

  • Japan's Services Producer Price Index rose 0.4% year-on-year; a 0.1% rise was expected
  • Leading Australian retailer, Woolworths, posted a $A1.2bn loss, its first as a listed company
  • WTI dropped 2.7% after an increase in EIA inventories
  • Asian markets opened lower, following the overnight US lead
  • At 0530 GMT, the Shanghai Composite was down 1.1% at 3053
  • At the same time, the Hang Seng was flat at 22,823; the Nikkei was 0.1% lower

Forex ahead

  • Asian currencies were treading water ahead of Janet Yellen's speech
  • The US dollar edged 0.2% higher on the yen to be 100.59

From the Floor

Pointers please. “The market is just desperate for some direction”, says Van-Peterson

(W)holesale change? “I actually think they could say something quite profound at Jackson for the long term but the impact could be minimal near term”, says Hardy

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Germany’s economic outlook is in focus today with economists expecting business sentiment to edge lower in August, writes James Picerno.

Losing lessons
Forex trading is a potentially rewarding undertaking, but as with other pursuits, to learn to be a winner you must first learn how to lose, explains Max McKegg.

Glitter dims
Precious mining stocks have tumbled as the market braces for Federal Reserve Chair Janet Yellen's speech, write the Saxo APAC Sales Trading team

Price rise
Despite Australian retailer Woolworths posting its first loss as a listed company, its shares rose nearly 7% in early trading, says the team at Saxo Capital Markets (Australia).


 Despite the EU's push for more tax Apple just announced 500 new jobs at its European headquarters in Cork, Ireland. Pic: iStock

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