Economic Calendar Summary: All Eyes on Kevin Warsh

Overview

The economic calendar for the end of the week is particularly eventful, with the primary focus on the speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole central banking symposium. This event is critical as it traditionally allows new Fed Chairs to outline their agendas and set policy directions.

Recent Fed Actions

In the previous month, the Federal Reserve opted to keep interest rates unchanged, despite a hawkish sentiment emerging within the Federal Open Market Committee (FOMC), where three members dissented in favor of a rate hike. The recent decline in inflation has not yet reached levels that would convince consumers and markets of a solid disinflation trend or the Fed's commitment to its policy.

Expectations for Warsh's Speech

Expectations for Warsh's speech are high, especially given his historically light communication style. A lack of concrete guidance or a repetition of vague communication could negatively impact the US dollar, while a dovish stance might be welcomed by Wall Street.

Key Economic Releases

Several important economic indicators are set to be released, including:

• Japan's core CPI inflation for August, which rose to 1.8% y/y, exceeding the consensus of 1.7% y/y.
• Japan's unemployment rate for July, which fell to 2.4%, better than the expected 2.5%.

These figures reinforce market expectations for further interest rate hikes by the Bank of Japan (BoJ).

Macroeconomic Calendar Highlights

Key releases for the day include:

• Germany - Import Prices (m/m) and (y/y)
• France - CPI Inflation (m/m) and (y/y), GDP (q/q), and Consumer Spending (m/m)
• Eurozone - Economic Sentiment Indicator, Consumer Confidence Index, and Services Sentiment Index
• USA - Chicago PMI, University of Michigan Consumer Sentiment Index, and Warsh's speech

Market Focus

Three key markets to watch include:

• USD/JPY: The Japanese yen is under pressure despite positive economic data, trading at its highest level since August 19.
• EUR/USD: Influenced by inflation readings from France and Eurozone sentiment indicators, with a shift in focus towards US data and Warsh's speech later in the day.
• S&P 500 / US500: The equity market may react to Warsh's speech, with additional support expected from Chicago PMI and consumer sentiment data.