The economic calendar for the end of the week is far from boring, yet the market’s primary—if not sole—focus will be the speech by Fed Chair Kevin Warsh at the Jackson Hole central banking symposium. A month ago, the Fed held interest rates unchanged despite a distinctly hawkish front forming within the FOMC (three members dissented in favor of a rate hike), and recent drops in inflation remained too far from the target for consumers and markets to fully buy into disinflation and Fed resolve. Jackson Hole has traditionally served as an opportunity for a new Fed Chair to outline an agenda and set the policy direction. Consequently, expectations for specifics from Warsh are running quite high, even given his previously light communication style. A lack of concrete guidance and a repetition of the loose communication seen at the last FOMC meeting could weigh on the US dollar, though Wall Street might welcome a dovish-leaning Warsh.

Key Releases from the Asian Session & Morning

• Japan : August core CPI inflation for the Tokyo region accelerated to 1.8% y/y (consensus: 1.7% y/y, previous: 1.7% y/y). The higher price pressure in the capital reinforces market expectations for further interest rate hikes by the Bank of Japan (BoJ). Meanwhile, July’s unemployment rate unexpectedly fell to 2.4% (against a forecast of 2.5%).

Macroeconomic Calendar (all times CET):

• 08:00 Germany – Import Prices (m/m) (July). Consensus: 0.3% | Previous: -0.7%
• 08:00 Germany – Import Prices (y/y) (July). Previous: 6.1%
• 08:45 France – CPI Inflation (m/m) (August). Consensus: 0.7% | Previous: 0.6%
• 08:45 France – CPI Inflation (y/y) (August). Previous: 2.1%
• 08:45 France – GDP s.a. (q/q) (Q2 Final). Consensus: 0.2% | Previous: -0.1%
• 08:45 France – Consumer Spending (m/m) (July). Consensus: 0.0% | Previous: 0.4%
• 09:00 Poland – BIEC Leading Economic Indicator (August). Previous: 176.6
• 09:55 Germany – Unemployment Rate s.a. (August). Consensus: 6.4% | Previous: 6.4%
• 11:00 Eurozone – Economic Sentiment Indicator (ESI) (August). Consensus: 97.5 | Previous: 96.9
• 11:00 Eurozone – Consumer Confidence Index (August). Consensus: -15.5 | Previous: -15.9
• 11:00 Eurozone – Services Sentiment Index (August). Consensus: 4.9 | Previous: 4.7
• 15:45 USA – Chicago PMI (August). Consensus: 58.0 | Previous: 57.6
• 16:00 USA – University of Michigan Consumer Sentiment Index (August). Consensus: 51.0 | Previous: 55.2
• 16:00 USA – Short-term Inflation Expectations (August). Consensus: 4.3% | Previous: 4.2%
• 16:00 USA – Long-term Inflation Expectations (August). Consensus: 3.3% | Previous: 3.3%
• 16:00 USA – Speech by Fed Chair Kevin Warsh at Jackson Hole
• 19:00 USA – Baker Hughes Rig Count. Consensus: 454 | Previous: 452

3 Markets to Watch Today

• USD/JPY (FX) – The Japanese yen is losing ground against most currencies despite a data series supporting rate hikes. Rising inflation and falling unemployment raise expectations for the BoJ, yet the market may be discounting the possibility of further, overly slow rate adjustments. USD/JPY is currently trading at its highest level since August 19 (159.500).
• EUR/USD (FX) – In the first part of the day, the eurodollar will be influenced by inflation readings from France (08:45) and a comprehensive package of economic and services sentiment indicators for the Eurozone (11:00). At 16:00, markets will shift their focus toward US data (the University of Michigan report) and Warsh’s speech in Jackson Hole.
• S&P 500 / US500 (Equity Index) – The Fed Chair’s speech could also shake up the equity market, although adopting an overly hawkish stance appears unlikely given the balanced comments from other Fed members. The index could receive additional support from Chicago PMI data and consumer sentiment figures.