Market movers today
ECB President Mario Draghi is due to speak today at 9:00 CET, giving a key note speech at the Lindau Nobel Laureate Meetings. We expect him to come back from the summer holidays with a dovish message - one that is likely to be delivered at Jackson Hole on Friday also. See Euro Area Research: Draghi returns to Jackson Hole with a dovish message , 18 August 2017.
Euro Flash PMI are also due for release. After a 10-month streak of rising manufacturing PMI in the euro area, we saw a decline from 57.4 in June to 56.6 in July. We saw declines in both activity and the leading order-inventory indicator. The appreciating euro is also likely to become a headwind for export orders, so we estimate manufacturing PMI has fallen to 56.2. Services PMI remained at 55.4 between June and July but has also started to show some exhaustion since April. While we expect services PMI to show a small decline to 55.2, we emphasise that PMIs remain at very strong levels, still pointing towards solid growth in Q3.
In the US, the Markit PMIs for both manufacturing and service are due for release. In July, manufacturing PMI took a large jump to 53.3, up from 52.0 in June, ending a five-month streak of declines. We expect the August figure to have remained around the 53.3 level. Service PMIs have shown a rising trend over the past four months, climbing from 52.8 in March to 54.7 in July. We expect the August figure to continue upwards to 55.0.
Other events will be the Fed's Robert Kaplan speaking (voter, dove), US new home sales and euro area consumer confidence.
To read the entire report Please click on the pdf File Below: