US: Key events for next week - Danske

Analysts from Danske Bank, expect that the main event next week in the US,  to be mainly on the annual Jackson Hole Economic Policy Symposium, where Fed Chair Janet Yellen is due to speak.    

Key Quotes:

“Next week in the US, we expect focus to be mainly be on the annual Jackson Hole Economic Policy Symposium from Thursday to Saturday, with Fed Chair Janet Yellen due to speak on Friday. The headline this year is Designing resilient monetary policy frameworks for the future. Focus has turned to the level of the natural real interest rate and the possibility of a higher inflation target to increase the distance to the lower bound of the nominal interest rate. Hence, the discussions at Jackson Hole could reveal some of the views of FOMC members on these topics.”

“Regarding data releases, we most importantly get preliminary durable goods orders for July on Thursday. Investments have been a major drag on US GDP growth in 2016. Core capital goods (mainly investment goods) have decreased since mid-2014 but have showed signs of bottoming in recent months. Hence, it will be interesting to us to see whether we have actually reached the bottom or whether we need to see a further downward correction in investments.”

“On Tuesday, we get the preliminary Markit PMI manufacturing index for August. In July, the index climbed to the highest level since October 2015, indicating that the manufacturing cycle has turned since the lows in early 2016. The ISM manufacturing index tells the same story. The PMI new orders index rose in July, indicating that the total index has increased in August. We do not see the index climbing further but expect it to stay around the current level. We are due to get the preliminary Markit PMI service index for August on Thursday.”