Weekly Outlook: 2017, August 20 - August 27

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The US dollar was looking for a new direction and it had a mixed week. The last full week of August features US housing data, durable goods orders and perhaps most importantly, the Jackson Hole Symposium. Here are the highlights for the upcoming week.

1. US New Home Sales: Wednesday, 14:00. A similar figure is on the cards now: 615K.
2. Crude Oil Inventories: Wednesday, 14:30.
3. UK GDP (second estimate): Thursday, 8:30.
4. US Existing Home Sales: Thursday, Thursday, 14:00. A small rise could be seen now: 5.57 million is projected.
5. US durable goods orders: Friday, 12:30. A fall of 5.7% is on the cards for the headline while the core number is expected to rise by 0.4%.
6. Jackson Hole Symposium – Draghi’s speech: Friday 19:00 This key economic gathering in Wyoming has been used to set the stage for significant changes in monetary policy, such as some of the Fed’s QE programs and also the ECB’s QE program. The topic for this year’s gathering is “Fostering a Dynamic Global Economy”. The key speeches are expected by Fed Chair Janet Yellen and ECB President Mario Draghi.
7. Jackson Hole Symposium: Yellen’s speech: will be eyed for any hints about the next rate hike. We already know that the Fed intends to begin squeezing its balance sheet in September, but the fate of the December rate hike is unclear given the recent softness in inflation.

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EUR/USD was pressured and slipped lower, but did not go far. Will it stay in range?. The upcoming week features Pthe PMIs, key German surveys and Draghi’s highly anticipated speech in Jackson Hole.

1. German ZEW Economic Sentiment: Tuesday, 9:00. The all-European measure stood at 35.6 in July.
2. Flash PMIs: Wednesday, 7:00 for France, 7:30 for Germany and 8:00 for the euro-zone.
3. Consumer Confidence: Wednesday, 14:00. A small increase is expected.
4. Belgian NBB Business Climate: Thursday, 13:00.
5. German Final GDP: Friday, 6:00. The German economy enjoyed robust growth and served as a locomotive. The final read will likely confirm the previous one.
6. German Ifo Business Climate: Friday, 8:00. Another small increase is expected now.
7. Draghi speaks at Jackson Hole: Friday 19:00. The announcement of Draghi’s speech in Jackson Hole already triggered high expectations. The president of the ECB used his 2014 speech in Wyoming to provide significant hints about the central bank’s QE announcement that followed in January 2015. This time, he is expected to hint about the beginning of the end of QE: an announcement of QE tapering to come in the Autumn and to begin in 2018. In the recent rate decision, Draghi stressed that there has been no discussion about tapering but his dovishness did not convince markets. Some expect him to play down expectations also now, in order to halt the rise of the euro. However, the recent strength of the common currency reflects the strength of the economy, and it will be hard for Draghi to change the course, even temporarily.

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