Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open +10pts at 7415 having flirted with a breakout from its tight 7400-7417 overnight trading channel, remaining above week-long rising lows support from 7300. Bulls will be looking for a comprehensive breakout to drive the index above yesterday’s 7440 and last week’s 7446 highs. Bears, meanwhile, look for the index retreat back to the 7400 channel floor before falling through the key support level. Watch levels: Bullish 7425, Bearish 7400.

Calls for another positive UK Index open to finish the week come as the Jackson Hole symposium heats up, at least as much as is possible at a central bankers’ conference. Key speeches from Federal Reserve Chair Yellen and ECB President Draghi will likely drive sentiment heading into the elongated weekend for UK traders, with markets looking for clarity on both central banks’ efforts to reduce accommodative policy. The US dollar and Euro be subject to increased price movement as a result.

Traders will also eye Crude Oil prices ahead of US hurricane Harvey, which is expected to hit Texas tonight, while Vodafone announces the launch of a £1.5bn share buy-back programme in accordance with its convertible bond offering.

Asian equity markets are predominantly higher as Energy names benefit from rising Crude Oil prices, however the commodity heavy Australia’s ASX bucks the trend, trading marginally lower, as corporate results weigh. Hong Kong’s Hang Seng outperforms on energy sector strength, while Japan’s Nikkei follows closely behind as the Yen holds steady against the dollar ahead of this afternoon’s Jackson Hole speeches.,

Large-cap US indices closed lower overnight ahead of Yellen’s appearance in Wyoming today, eagerly awaiting further clarity on both interest rates and the balance sheet. Despite some Retail sector strength as a result of the regulatory and shareholder approval of Amazon’s merger with Whole Foods, the S&P 500 closed 0.2% lower, while both the Dow Jones and Nasdaq closed 0.1% lower.

Crude Oil prices have ticked higher overnight ahead of the landfall of US hurricane Harvey, however both Brent and US benchmarks are yet to return to yesterday’s highs. Whilst benchmarks pared gains on demand concerns and a rallying US dollar yesterday afternoon, they have since mirrored the sharply higher gasoline prices. Brent is trading at falling highs resistance at $52.5 while US trades at $47.8.

Gold continues to trade sideways ahead of Yellen and Draghi’s speeches this afternoon, with traders hoping to react to any potential shifts in monetary policy from both the Fed and the ECB. The US dollar rallying from its lows has left the precious metal trading at the bottom of its tight $1286-1289 narrowing pattern, priming the safe-haven asset for a break higher or lower.

In focus today will be key speeches from Fed Chair Janet Yellen and ECB President Draghi on the second day of the Federal Reserve’s Jackson Hole symposium at 3pm and 8pm respectively.

Comments made by US policymakers so far from the Wyoming gathering have generally been supportive not just of an unwinding of the Fed’s bloated balance sheet, but also for another rate hike before the end of the year. Markets now look to Yellen to clarify the institution’s stance on both of these pivotal events, with any shred of new information likely to be thoroughly scrutinised by investors. Watch USD and Wall Street.

However, Yellen may well be overshadowed by her European counterpart. The ECB President has made a habit of going off script at Jackson Hole in the past, and whilst a report from Reuters last week stated insiders believed no major policy announcements were to be made, many are hoping he may let slip an implicit hint at the start date of the ECB’s long-awaited QE taper. Watch the Euro and DAX.

Data-wise, the calendar is limited to German IFO Surveys (9am), expected to retreat across the board after posting fresh all-time high readings in July, US Durable Goods Orders (1:30pm), with the headline print seen slowing whilst the core measure accelerates, before the US Baker Hughes Rig Count (6pm) rounds off the week’s data.

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Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

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