Monday August 22nd

22-08-2016

Yellen’s speech at Jackson Hole set to dominate mood on Wall Street

U.S. stock index futures pointed to a lower open Monday, as investors remain on edge ahead of the U.S. Federal Reserve's Jackson Hole meeting later this week, while keeping an eye on oil prices. The U.S. central bank will be of key importance this week for investors, as its Chair Janet Yellen, is set to give a speech on August 26 at the Federal Reserve Bank of Kansas City's annual Economic Policy Symposium at Jackson Hole, Wyoming. Investors will be looking to the Fed, to see if it provides any indications as to when it may raise interest rates, while giving a long-term outlook on the state of the U.S. economy. "Yellen has a great opportunity this Friday to send a clear and concise message to investors, the problem being that I don't think anyone would be surprised if we're once again looking back on this as another missed opportunity," Craig Erlam, senior market analyst at OANDA, said in a note. "The markets currently have March priced in for the next rate hike and if Yellen is seriously determined to move earlier, she must take advantage of Friday's opportunity to drive that message home." Several Fed officials spoke out last week about when the U.S. central bank could raise interest rates, while Fed Vice-Chairman Stanley Fischer said Sunday that the U.S. central bank was close to hitting its targets for 2 percent inflation and full employment. On the earnings front, Nordson and Premier are among the corporates set to report on Monday. No major economic releases are due out on Monday. Meanwhile, crude futures came under pressure on Monday, as analysts showed doubt over whether leading oil producers would successfully tackle the supply glut seen the market. WTI and Brent sat around $47.40 per barrel and $49.50, respectively. European stocks traded lower on Monday, while Asia-Pacific indexes closed mixed to lower overnight. In the previous session, U.S. indexes ended lower with utilities slipping more than 1 percent. South Korea's benchmark index, the Kospi, slipped 14.08 points, or 0.68 percent, to 2,042.16. In Hong Kong, the Hang Seng index fell 0.43 percent in afternoon trade. Chinese mainland markets were also lower, with the Shanghai composite closing down 23.34 points, or 0.75 percent, at 3,084.76 and the Shenzhen composite dropping 26.03 points, or 1.27 percent, to 2,018.65. Markets in Japan bucked the regional downward trend to finish up, likely boosted by a weaker yen and anticipation of further monetary policy actions from the Bank of Japan. The Nikkei 225 added 52.37 points, or 0.32 percent, to 16,598.19, while the Topix index was up 8.01 points, or 0.62 percent, at 1,303.68. Gold fell to a two-week low on Monday as upbeat comments from Federal Reserve officials on the U.S. economy boosted expectations that the central bank could lift interest rates sooner rather than later. Gold is highly sensitive to U.S. interest rates, increases in which boost the opportunity cost of holding non-yielding gold, while lifting the dollar, in which it is priced. Spot gold was down 0.33 percent at $1,336.71 an ounce, while U.S. gold futures for December delivery were down $5.30 an ounce at $1,340.90. The world's largest gold-backed exchange-traded fund (ETF), New York-listed SPDR Gold Shares, reported an outflow of 4.5 tonnes last week, adding to the near 20-tonne drop in its holdings the previous week, data from the fund showed.