Overnight Recap And Today's Key Events

Following a series of bad economic news (Eurozone unemployment, rising inflation, plunging retail sales in Germany, Spain and Greece) out of Europe, and the usual sound and fury out of the ECB signifying nothing (was there finally news that Weidmann and/or the Buba are endorsing anything Draghi is doing - instead of seeking to potentially quit his post leaving the ECB in limbo? No? Then stop flashing red headlines which are completely irrelevant), the EURUSD has decided to go on its usual countersensical stop hunt higher in hopes an algo or two will push it even higher on nothing but momentum, with has one purpose only: to allow the pair enough of a buffer so that when it does fall after the J-Hole disappointment, it has more room to drop. And as European newsflow fades into the periphery, everyone is once again focusing on Wyoming where Bernanke is now broadly expected to do absolutely nothing. What else are market participants focusing on? Here is the full ist courtesy of Bloomberg daybook.

  • Treasuries decline before Bernanke’s Jackson Hole speech, scheduled for 10am New York time; 10-yr yields lead curve higher.
  • Economists and strategists don’t expect the Fed chairman to signal imminent policy moves
  • Euro-area unemployment rose to a record 11.3% in July and inflation quickened more than economists forecast as rising energy costs threaten to deepen the economic slump
  • The Bundesbank declined to be drawn on whether President Jens Weidmann considered resigning over the ECB’s plan to resume bond purchases, as tension between the two institutions mounts
  • ECB Executive Board member Joerg Asmussen said the IMF should be involved in setting conditions for countries applying for bond-buying aid from Europe’s bailout fund
  • The ECB would have the sole power to grant banking licenses under proposals to give the central bank supervisory powers and build a euro-area banking union, a EU official said
  • JPM economist Malcolm Barr expects ECB to implement “soft cap” on front-end yields, where purchases establish range wherein ECB resistance to higher yields becomes progressively stronger
  • French corporate leaders criticized Socialist President Francois Hollande’s government for policies they say hurt companies already battered by a slowing economy and decades of business-unfriendly practices
  • Mitt Romney accepted the Republican presidential nomination and reached out to disaffected supporters of President Barack Obama, framing the election as a choice between two visions of the role of government in America
  • Clint Eastwood said U.S. unemployment is a “national disgrace” and that the Obama administration isn’t “strong enough” in dealing with 23m unemployed
  • The ECB is using Europa, a figure from Greek mythology, improve security on new euro banknotes, four people familiar with the design said
  • EUR/USD gains, touching 100-DMA at $1.2584.  German bunds decline while Spanish and Italian 10-yrs gain. Peripheral
    spreads tighten. European stocks and U.S. equity-index futures rise. Crude gains
  • Credit steady amid a dearth of new issuance, with Markit IG at 103bps, Markit HY at 544bps

WHAT TO WATCH: (All times New York) Economic Data

  • 9:45 am: Chicago Purchasing Managers, Aug., est. 53.5 (prior 53.7)
  • 9:55 am: University of Michigan Sentiment, Aug. final, est. 73.6 (prior 73.6)
  • 10:00 am: Factory Orders, July, est. 2.0% (prior -0.5%)
  • TBA: NAPM-Milwaukee, Aug. (prior 46.7) Central Banks
  • 10:00 am: Fed’s Bernanke speaks at Jackson Hole conference
  • 11:55 am: BOE’s Haldane on financial stability at Jackson Hole
  • 1:15 pm: BOE’s Posen on monetary policy at Jackson Hole