World Markets Live - August 25 - CNBC Live Events
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CNBC Live Events

World Markets Live - August 25

We’ll be updating you throughout the day with essential breaking news, data alerts, earnings reports and all the major market movements.

  • U.S. markets are called to open higher. This after the major indexes recorded losses in yesterday's session. 
     
    Market attention is turning to the Jackson Hole economic symposium, due to begin at 10:00 a.m. ET.
     
     
  • Spain's 10-year government bond yield rose to 3 basis points to its highest level in almost 4 weeks at 1.508 percent today.
     
     
  • The U.K. public's August expectations for inflation is 2.6 percent for the year ahead, up from 2.5 percent in July.
     
    Expectations for longer-term inflation is 3.2 percent, versus 3.1 percent in July. That's the highest since 2013, according to Citi and Yougov.
  • The global economy is seeing positive momentum according to a new report from Danske Bank.
     
    Major central banks are unlikely to put significant brakes on the expansion for now. This should support risk assets near term and we recommend buying equities on dips.

    Expectations on Trump's growth-friendly reform agenda are at a minimum and can only surprise on the upside to some extent. The EUR/USD is set to range-trade near term but head for 1.30 in coming years.
  • Big Lots reports Q2 earnings per share of 67 cents. Net income is $29.1 million on revenue $1.22 billion. Same store sales rose 1.8 percent in the quarter.
  • The U.K.'s CMA says it has provisionally cleared the acquisition by Cardtronics of rival ATM provider DirectCash Payments.
  • Aside from Hurricane Harvey, the big focus for markets today is the gathering of the world's top central bankers in the mountain town of Jackson Hole for the annual Kansas City Fed's Economic Symposium.
     
    Investors are waiting anxiously for Chair Janet Yellen's speech at 15:00 CET, in what could be her last at Jackson Hole as head of the Federal Reserve. While they're not expecting any significant shift in policy, Fed-watchers have indicated her comments could outline a course-charting path for a possible successor, with a focus on how the central bank plans to unwind its balance sheet.
     
    ECB-watchers, meanwhile, are hoping for a sign from President Mario Draghi that the central bank could begin to taper.
     
    Yellen and Draghi at Jackson Hole in 2014.
     
    Forex markets are trading cautious ahead of the speeches by the central banks chief, according to Sue Trinh, head of Asia FX strategy at Royal Bank of Canada.
     
    Subdued short‐term implied vol suggests the market expects little in the way of fresh policy cues however. Beyond Jackson Hole, attention will quickly shift to the US debt ceiling; comments from President Trump indicate negotiations are contentious.
     
    All eyes will be on Jackson Hole. Aside from a spot of fly fishing, central bankers, government officials, and high profile academics will be engaged in the conference theme of “Fostering a Dynamic Global Economy”.
     
    The highlight will be Fed Chair Yellen speaking... on the topic of financial stability. The other highlight is ECB President Draghi, where the bar is low for forward guidance. Markets will also be sensitive to any attempts to jawbone exchange rates, particularly in the case of EUR.
  • The Jackson Hole symposium and the speeches from Draghi and Yellen are highly anticipated by markets today.
     
    However, observers expect few policy hints to emerge today, according to David Lafferty, chief market strategist at Natixis Global Asset Management.
     
    The Fed’s position was largely laid out in last week’s release of the July FOMC minutes, leaving Yellen little reason to expound. Draghi will likely be even more cautious as his most recent comments in Sintra were considered hawkish, sending shockwaves through the European bond market with a mini-spike in rates.
     
    Because the Fed is already raising rates and has outlined its QE draw-down caps, there is a higher threshold for Yellen to disturb the markets.  With more uncertainty around future policy, Draghi will have to walk more softly.
     
    Lafferty predicts neither central banker will address the issue of inflation.
     
    Central bankers, especially at the Fed, have been perplexed by muted wage growth in the face of full employment. Will anyone reiterate their long-standing belief in the Phillips Curve, and by extension, make hawkish headlines?
     
    We expect currency and bond markets to be moved little by speeches at the symposium – unless someone makes a mistake. For now, the US dollar has steadied against the Euro.  While the Euro has only regained about 40 percent of its 2014-15 losses, a continued climb against the greenback risks an even larger undershoot of the ECB’s inflation target.
     
    With the U.S. and European economies both showing some strength, currency stability would seem to serve both Yellen and Draghi well.  Neither central bank chief is looking to make headlines at this year’s event.
     
    The euro is up nearly 5 percent over the past 12 months against the dollar. In today's trade, the common currency is broadly flat against its U.S. counterpart.
     
     
  • We're half an hour away from the midday point in European trade. The Stoxx 600 is up more than 0.4 percent today.
     
    The market is being led by strong gains in the basic resources, financial services and constructions sectors.
     
    Here's how the individual European markets are performing.
     
     
     
  • President Donald Trump is calling on the Republicans in the Senate to get rid of the filibuster rule. He claims that just 8 members of the Democratic Party control the whole of the Senate.
  • Markets are looking ahead to the Jackson Hole economic symposium today, where central bank chiefs Mario Draghi and Janet Yellen will be making speeches.
     
    Philippe Waechter, chief economist at Natixis Asset Management, says he expects some hints on how the Fed and ECB will adapt their strategy to the current global economic situation.
     
    The current situation is that there is no growth acceleration in the U.S. as productivity gains remain low while the inflation rate is now below the Fed's target. So the Fed mustn't hurry in normalizing its monetary policy. More than that as there is still no economic policy from the White House there is no need for a tighter monetary policy in one of the longest business cycle.
     
    But the Fed will manage its balance sheet and we don't know ex ante the impact that this operation will have on the fixed income market. The Fed must be able to intervene if the new equilibrium is not stable. For me that the main reason for the Fed has to increase its rate. Just to have leeway in case of a negative shock on this adjustment. 
     
    What remains impressive in the U.S. is the fact that the business cycle is not able to create nominal pressures. This change the way the Fed has to fix its strategy.
     
    Waechter thinks Draghi will say that he will not anything that may harm the recovery. 
     
    We are in a rather strong situation on growth side specifically in the EA and we need to have hints on how they will be able to foster global growth. A monetary policy normalization could hurt growth and it's too early to imagine specifically in the EA. A normalization could create a recession in the U.S. and could hurt the recent recovery in the EA. That's why we expect many explanations from central bankers on what they will do. 
     
    I cannot expect that they won't say something specific in this symposium. The audience is worldwide so if they have a message it is the good place to do it. If they say nothing there is a risk of credibility. Implicitly a silence would say that they do not understand precisely the current situation and that would be negative for markets.
  • President Trump is active on Twitter this morning. He says that White House Chief of Staff John Kelly is doing a "fantastic job" and is praising the performance of administration.
  • U.S. stock index futures pointed to a slightly higher open on Friday, as investors continued to focus their attention on the monetary policy symposium at Jackson Hole.

    Friday marks the second day of the 2017 Economic Policy Symposium on "Fostering a Dynamic Global Economy" at Jackson Hole, where leading central bankers are meeting.
     
     
     
  • Futures point to a slightly higher open on Wall Street, as investors await remarks from Jackson Hole

    CNBCU.S. stock index futures pointed to a slightly higher open on Friday, as investors focused on the policy symposium at Jackson Hole.
  • Frankfurt could become a miniature version of London after Brexit, a city official has predicted, after a study said tens of thousands of jobs would be created, bolstering Germany's banking capital. The research, commissioned by the city's chief promoter, is the first comprehensive tally on possible job creation in Frankfurt, as London, its dominant British rival, prepares for life outside the EU. That's according to Reuters.
     
    The analysis predicts there will 10,000 bankers and finance professionals in Frankfurt within four years and that their arrival could create more than 41,000 further jobs, from estate agents to taxi drivers and building workers. 
       
    "It's not the City of London but perhaps it can become a little London," said Oliver Schwebel, chief executive of Frankfurt Economic Development, the state agency that promotes the city known for skyscrapers that house Deutsche Bank and others.  
  • Janet Yellen will be giving what could be her last speech Friday as Fed chair at the annual gathering in Jackson Hole, Wyoming, closing out a remarkable decade in central banking history.

    Whether Yellen gets reappointed in February is an open question. President Donald Trump has expressed disdain and respect for her and has not committed to the future.
     

    Fed Chair Yellen set to deliver what could be historic speech in Jackson Hole

    CNBCChair Janet Yellen will be giving what could be her last speech at the Fed confab in Jackson Hole, Wyoming, closing out a remarkable decade in central banking.
  • 13 people are now reported dead in Indian protests at the guilty ruling of sexual assault by of a self-styled "god man". This according to Reuters.
     
    The Indian army was deployed in the city of Panchkula in North India, shortly after the court pronounced Ram Rahim Singh guilty of sexual assault.
     
    According to the Guardian newspaper, electricity supplies, mobile internet and cable television had been cut in parts of Haryana and Punjab state ahead of the verdict as up to 200,000 members of his following massed in Panchkula as a show of defiance and support.
  • The National Hurricane Center says the weather front set to hit the U.S. coastline at the Gulf of Mexico is about 145 miles south to south east of Port O'Connor, Texas.
     
    Hurricane Harvey is said to have maximum sustained winds of 110 mph.
     
    Harvey rainfall map from NHC.
     
     
    Investor Dennis Gartman says the event risk is priced in.
  • The euro has tried to make a run higher against the dollar prior to Jackson Hole, but it seems the bears were waiting for the bulls.
     
    Trade is thin as the holiday season combines with a reluctance to take positions before today's speeches on both sides of the ledger from Draghi and Yellen.
     
     
  • Let's check on European markets that are trading higher:
     
     
  • Thyssenkrupp should consider alternatives to a planned merger of its European steel activities with those of Tata Steel, German foreign minister Sigmar Gabriel said on Friday.
    My actual request to the company is to look at other alternatives, Gabriel said in Duisburg, Germany's largest steelmaking centre.

    Gabriel added this should not happen publicly, "but in strategic sessions, maybe even with the state and with labour representatives".

    Thyssenkrupp Chief Executive Heinrich Hiesinger is interested in a tie-up of the group's European steel operations with those of rival Tata Steel, but workers fear such a move would result in the loss of thousands of jobs.

    "There are national (alternatives) that can be discussed, there are international (alternatives), there are alternatives in the company," Gabriel said.
  • UK government says will now carefully consider new advice on Fox-Sky deal, before deciding on a regulatory referral, will do so as is reasonably practical. That's according to Reuters.
  • Wall Street stocks are now open for trading. All three major indexes are trading higher at open as investors wait for clues from Jackson Hole:
     
     
  • US stocks open higher ahead of Yellen speech, on hopes of tax reform

    CNBCU.S. stocks opened higher on new hopes of tax reform and ahead of speeches from central bank leaders Janet Yellen and Mario Draghi.
  • German utility E.ON and Norwegian oil and gas firm Statoil have started construction of a 385-megawatt wind farm off the German coast, the firms said. That's according to Reuters.

    The 1.2 billion euro ($1.4 billion) wind farm in the Baltic Sea should become operational by 2019 and be able to supply electricity to up to 400,000 households in Germany, E.ON said in a statement.

    "Construction work on the Arkona wind project in the German Baltic Sea has begun... the first foundations have been successfully laid in the seabed," E.ON said.

    Arkona is a joint venture between E.ON and Statoil. Each company holds a 50 percent stake.
  • Yellen: System is safer now, though 'all-too-familiar' risks remain
     
    • Fed Chair Janet Yellen said actions regulators took in the wake of the financial crisis have made the system safer.
    • She cautioned that risks remain though the crisis has taught lessons.
    • Her remarks came during the Fed's annual conference in Jackson Hole, Wyoming, and did not address future monetary policy actions.
  • Some market reactions as Yellen speaks at the Jackson Hole symposium. Dollar drops vs yen, euro after Fed's Yellen does not mention monetary policy in Jackson Hole remarks. 
     
     
  • Janet Yellen: System is safer now, though 'all-too-familiar' risks remain

    CNBCYellen says the financial system is safer now than it was, though some adjustments to regulations may be needed.
  • Italian bank Intesa Sanpaolo has encountered problems syndicating a loan to Glencore and Qatar's wealth fund to finance their purchase of a stake in the Kremlin-controlled oil major Rosneft because of new U.S. sanctions against Russia. That's according to Reuters.

    Four banking sources told Reuters that Western banks including from the United States and France have so far put on hold their participation in the syndication of the 5.2 billion euro ($6.13 billion) loan that Intesa provided last year.
     
    Intesa invited about 15 banks to join the loan when it opened the syndication in May. A loan of this size would normally take between four and six weeks to syndicate, though deals involving emerging markets can sometimes take a few weeks longer.
     
    The banking sources said their compliance departments needed to understand the new sanctions.
     
    They also said the syndication was complicated by a political stand-off between Qatar and Saudi Arabia. Banks are taking a more cautious approach to deals involving Qatar as they are wary of damaging their relations with Saudi Arabia and the other three Gulf nations embroiled in the dispute.
     
    The syndication is stuck because of new U.S. sanctions on Russia. The new sanctions are so wide-reaching that they will surely impact all similar deals involving Russian state firms, said a London-based source with a large Western bank invited by Intesa to participate in the syndication.
  • Sterling jumped on Friday to its highest level in four days after Federal Reserve Chair Janet Yellen made no reference to U.S. monetary policy in her speech, though analysts warned the outlook remained bleak for the British currency.

    Investors were not expecting Yellen to make a policy statement anyway, but some market participants were hoping for some signal at least on the Fed's planned balance sheet reduction, if not on the outlook for U.S. interest rate hikes.

    Instead, Yellen focused on U.S. financial reforms at the central banking conference in Jackson Hole.
     
     
  • European stocks are now closed for trading. The pan-European Stoxx 600 has closed fairly flat as investors focus on Draghi's speech at Jackson Hole:
     
     
     
     
  • Major European indexes have also closed fairly flat. Here's how they have gone home:
     
     
  • And that's all from us here at World Markets Live. We will be closed on Monday for the UK bank holiday. Join us from 0600 on Tuesday for more news and analysis.
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