Just in case traders haven't gotten whiplash from all the hawkish-to-dovish-to-hawkish shifts in central bank posturing over the past month, here is the WSJ which reports that for the first time in three years, ECB's Mario Draghi is scheduled to address the Fed's Jackson Hole conference in August, "in a speech that is expected to give a further sign of the ECB’s growing confidence in the eurozone economy and its reduced dependence on monetary stimulus."
While the Fed debates whether to hike rates in December (market odds are now roughly 50%) and announce the winddown of its balance sheet in September, the biggest question facing the global market is the future of the ECB’s €60 billion QE program, currently due to run through December, and when it will start tapering. Technically, according to Deutsche, even more important is the BOJ's QE but that particular monetization program is likely to continue well into 2018 as the Nikkei reports. As such the marginal flow of liquidity in global markets is in the hands of Mario Draghi.
Just as importantly, the WSJ reported that shortly after Draghi's scheduled address, the ECB officials "is likely to signal at its Sept. 7 policy meeting that the bond-buying program... will be gradually wound down next year."
Mr. Draghi’s speech in Jackson Hole will take place less than two weeks before the ECB’s September meeting, providing an obvious opportunity to signal a policy shift before the blackout window closes a week ahead of the meeting.
Jackson Hole has a symbolic meaning for Draghi: during his last speech at Jackson Hole, in August 2014, the ECB president hinted at the start of the ECB's QE "Signaling the end of the program at the same event would have a certain symmetry, a person familiar with the matter said."
Of course, this - like so many other trial balloons - course may be promptly discarded: ECB officials "caution that the timeline could yet change if economic data turn out weaker than expected. They will gather in Frankfurt on July 19-20 for the ECB’s next policy meeting, but aren’t expected to announce any major changes yet." In other words, if the Stoxx 600 were to tumble between now and then, all bets are off.