The FTSE, DAX and CAC all started the session flat, with the FTSE managing to stay above its key 7400 level. The German and French indices were similarly stagnant, but unlike the FTSE, which is up over 100 points this week, the major European indices have less to show for their efforts.
Spreadex Analyst, Connor Campbell suggested “It looks like it is going to be one of those days, with the European markets snoozing their way through the open.”
That’s because the day’s main events – the Jackson Hole Symposium speeches from Janet Yellen and Mario Draghi – aren’t until this evening, leaving investors in a state of anticipatory reticence.”
“Large-cap US indices closed lower overnight ahead of Yellen’s appearance in Wyoming today, eagerly awaiting further clarity on both interest rates and the balance sheet.” Suggested Accendo Markets Analyst, Henry Croft. “Despite some Retail sector strength as a result of the regulatory and shareholder approval of Amazon’s merger with Whole Foods, the S&P 500 closed 0.2% lower, while both the Dow Jones and Nasdaq closed 0.1% lower.
So, it’s all about the Jackson Hole Symposium. Currency traders will be keeping a close eye on the Dollar and the Euro as both Yellen and Draghi are set to speak this evening.
“The dollar’s medium-term outlook will equally depend on Janet Yellen’s speech at Jackson Hole and the timing of her speech is really interesting” suggests ADS Securities Analyst, Konstantinos Anthis. “If Yellen stays the course and allows investors to believe that a hike in December is still a likely scenario the dollar will remain supported; should she take a step further and go into details about the degree of balance sheet normalization she deems appropriate, then the dollar will benefit greatly.“
The Euro’s price action, however, will be dictated by the course of action Mario Draghi feels is more appropriate at this time. Konstantinos Anthis commented “It seems that investors feel pretty good about the currency’s outlook and this is mostly attributed to the fact that even if Draghi says nothing at this point, tapering is indeed around the corner. This would mean that any correction to the downside – in case of a less than exciting Draghi speech – would be treated as a buying opportunity from traders focused on the medium term”