Market Eyes on Wyoming, Texas and D.C.

August 25, 2017

Speeches by Yellen at 14:00 GMT and Draghi at 19:00 GMT highlight today’s agenda at the central banking summit in Jackson Hole, Wyoming. The big economic mystery is the apparent disconnection between better growth yet continuing subdued global price and wage inflation. The questions surrounding monetary policy are whether the Fed sanctions another rate hike as soon as December and what the European Central Bank will do about winding down quantitative easing. Monetary officials at both banks seem somewhat split on these policy moves.

A huge and slow-moving hurricane is bearing down on the Texas coast.

Tensions between the Trump presidency and the Republican-controlled Congress continue to build over the federal budget in yet another game of chicken over the need to raise the debt ceiling before the end of September.

Japanese core consumer prices recorded no change in July on a seasonally adjusted basis for a sixth straight month, but the 12-month core CPI increase accelerated 0.1 percentage point to 0.5%, highest since December 2014. Service sector consumer prices were 0.1% lower than a year earlier, however.

Japan’s corporate service price index posted a monthly increase in July for the first time since March, but its on-year increase dipped 0.1 percentage point to a 6-month low of 0.6%.

German import prices dropped 0.4% in July and fell in year-on-year terms to an 8-month low of 1.9%. Such had crested last February at 7.4%. Non-energy import prices declined 0.5% between June and July. Export prices dipped 0.1% on month.

Spanish and Swedish producer prices advanced 3.2% and 5.7% over the twelve months through July.

German real GDP increased 0.6% on quarter in 2Q and was 2.1% greater than a year earlier when adjusted for variations in the number of working days. Personal consumption and inventory building provided the main impetus for growth last quarter, while net exports exerted a drag on both year-on-year and quarterly GDP growth.

The German IFO Institute’s business climate index for Euroland’s largest economy edged down to 115.9 in August from a record 116.0 reading in July. The current situation settled back a bit, causing wholesale and retail to slip to 3- and 5-month lows, but business expectations continued to move higher.

French consumer sentiment dropped a point to a 3-month low reading of 103 in August. Such had soared previously from 100 in April to 108 in June.

South Korean consumer confidence also fell to a 3-month low, declining to 109.9 in August from 111.2 in July but remaining well above April’s reading of 101.2.

Brazilian consumer sentiment, in contrast, improved 0.4 points to a 3-month high of 82.4.

Industrial production in Singapore shot up 21% in the year to July, most in eight months. Austrian industrial output climbed 4.5% between mid-2016 and June 2017.

U.S. durable goods orders and the U. Michigan/Reuters monthly consumer confidence index will be reported today. So will Mexico’s current account and jobless rate. British markets will be closed for a late summer holiday on Monday, giving workers there a 3-day weekend.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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