Jackson Hole provides little in the way of monetary policy update
On the whole, the Jackson Hole symposium provided very little in the way of fresh indications on either the Fed or the ECB’s monetary policy, market experts say.
FED
European equities provide higher income than high-yield bonds
Currently, even yields on European high-yield bonds are below equity dividend yields, making investment in stocks a better way of generating income. For US bonds, the focus is on the Fed’s planned balance sheet normalisation.
Secular stagnation rears its head once again; the global economy is not yet back to normal after the crisis
The global economy is not yet back to normal after the crisis. The real figures continue to show that Larry Summers and his “Secular Stagnation” hypothesis are right. We are not strong. And every time we want to break the pessimism, the indicators are weak.
Jackson Hole: Yellen could provide clues on monetary policy; Draghi seen keeping low profile
US Fed chair Janet Yellen and ECB President Mario Draghi will both be speaking at the Jackson Hole conference later this week. They will be under close scrutiny from investors for any clues on future monetary policy decisions. Analysts believe the Fed should matter more than the ECB at this week’s event.
FED, ECB monetary policy: communication counts when doubts increase
The minutes released by the FED and the ECB last week shared concern about how to inform about their monetary stance. They fear unsettling the markets should investors wrongly interpret the messages conveyed to them. When you lack a clear policy perspective, the best thing you can do is to manage communication in a fairly tight way.
Muted inflation still concerns Fed with regard to future tightening moves
The minutes of the Fed’s late July meeting released yesterday reflect ongoing concern about muted inflation data, as well as the fact there seems to be some discrepancy amongst FOMC members over when would be the right time to begin the normalisation of the central bank’s balance sheet.
Summer lull continues; but investor focus this week on German GDP figures, Fed meeting minutes
The summer lull may continue to dampen stock market activity during the month of August, but there are two key events on the investor agenda this week. German GDP figures for Q2 and the minutes of the Fed’s late July meeting.
European firms H2 earnings show solid performance from sectors like telcos, airlines
Pablo García Gómez (Carax Alphavalue) |Sector earnings from Europe for the second half of 2017 have been overall solid, with some positive surprises from “heavy cyclicals” like oil and metals and mining.
Could the central banks dampen the financial markets’ enthusiam?
Kommer van Trigt (Robeco) | The markets are discounting that in the next few months there will be more certainty surrounding the central banks’ normalisation strategy. In its quarterly outlook, Robeco’s Global Fixed Income Macro team says it makes sense for the central banks to begin to normalise their policies.
Monetary normalisation process remains on track
José Luis M. Campuzano (Spanish Banking Association) | The markets are discounting that in the next few months we will see greater certainty in monetary normalisation strategy. The start of the Fed’s balance sheet adjustment can also provide the rest of the central banks with information on the reversion of quantitative measures.