Inflation on agenda as world's bankers meet

U.S. Dollar Index

While the Aussie continued to make ground against the greenback, it finished mixed against the crosses, likely reflecting position adjustments from traders ahead of the Jackson Hole Economic Symposium that will begin later in the week. Both the European Central Bank and Federal Reserve find themselves pursuing a less accommodative monetary policy, and the markets will be listening closely to Janet Yellen and Mario Draghi.

"It's an important event because we're at a critical crossroads for many central banks, especially, I would say, for the ECB".

Deutsche Bank Markets Research team agrees the Fed "should matter more than the ECB at Jackson Hole", highlighting the fact it is "in the driving seat" in terms of further interest rate moves.

In other M & A news, AP Moeller Maersk sold its oil and gas unit to French oil major Total for $7.45bn. Last year, Ms Yellen attracted most headlines, delivering a hawkish speech that sent the U.S. dollar higher. We would look for a stronger euro in the lead up to the Jackson Hole conference.

Also, the markets were jittery after the start of annual military exercises by South Korean and US forces angered North Korea, which denounced the joint drills as a step toward nuclear war.

Yellen will speak on the topic of financial stability at 8 a.m. local time (10 New York) on August 25 at the Kansas City Fed's annual symposium, the Fed said on Thursday.

All eyes will turn to the Jackson Hole Economic Symposium, taking place on August 24 to 26, where several of the top central bankers are expected to shed more light on their respective monetary policies.

Locally today traders will be watching for travel and migration data for July to see whether net immigration, a key plank of the economy's growth, is continuing at record levels.

Stock markets have spent the year rising on bets of a resurgence in inflation, while central bankers trying to manage the global economy have spent the same time repeatedly reassuring everyone it's just around the corner. Mario Draghi's comments will attract just as much attention given the eurozone economy is solid and still growing to the point where markets expect the European Central Bank to start giving a schedule to unwind its hue quantitative spending campaign. While this move below 1.29 levels was largely expected, albeit very delayed, technically we expect to see a further move downwards towards 1.2626 levels.

Analysts view an abrupt shift in monetary policy as a risk to stocks.

In the case of Ms Yellen, the big question investors have is how optimistic she is about the United States economic recovery, which will in turn provide clues on the speed and extent to which monetary policy will continue to tighten.

The US June 30 earnings season has nearly exhausted itself - a few retailers such as Abercrombie and Fitch, Guess?, Dollar Tree, Burlington Stores, Tiffany, American Eagle, Lowes Cos, JCrew and Williams Sonoma are expected to report.



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