Published: Sun, August 27, 2017
Markets | By Erika Turner

Stocks firm up ahead of central bankers' meeting

Stocks firm up ahead of central bankers' meeting

European Central Bank President Mario Draghi took aim Friday at economic protectionism and efforts to deregulate financial markets in a speech at the Jackson Hole economic symposium in Wyoming.

In June, the Republican-led U.S. House passed a bill to replace Dodd-Frank, but it is unlikely to have enough votes to overcome a Democratic filibuster in the Senate. This morning we'll have the revised GDP data for Germany although, as mentioned earlier, the common currency is likely to remain stuck within a range during the London session ahead of today's Jackson Hole meet in the US.

"Beyond Jackson Hole, attention will quickly shift to the USA debt ceiling; comments from President Trump indicate negotiations are contentious", says Sue Trinh, an FX strategist at Royal Bank of Canada.

Yellen's predecessor, Ben Bernanke, signaled a new round of Fed bond purchases in 2010 to try to invigorate a weak US recovery.

"Large-cap U.S. indices closed lower overnight ahead of Yellen's appearance in Wyoming today, eagerly awaiting further clarity on both interest rates and the balance sheet". The CAC 40 in France was 0.2 percent lower at 5,122.

The dollar index, which tracks the USA currency against a basket of six other major currencies, gained 0.08 per cent to 93.22 after falling 0.4 per cent on Wednesday. While it rose against the yen and the euro, it held steady against the franc and the pound.

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The official death toll in Macau hit 10 on Friday night after yet another man's body was pulled from an underground vehicle park. Macau has rapidly transformed since 1999 into a gambling hub many times larger than Las Vegas, with major US casinos piling in.

Looking at reactions in forex markets, the dollar was trading at 109.36 yen, the euro/dollar pair rose to 1.1855 and sterling reached $1.2854 in early exchanges during the USA session. Durable goods orders are scheduled for 8:30am and are expected to grow 0.4% ex-transportation.

German business confidence weakened slightly from a record high in August, reports said citing survey results from Ifo institute on Friday. The consumer sentiment index came in at 103 versus 104 in July. Toyota Motor Corp gained 1.1 percent, Honda Motor Co rose 0.7 percent and Advantest Corp climbed 1.0 percent.

The lack of direction on monetary policy put pressure on the dollar, with the pound climbing almost a cent against the greenback to $1.29. WTI was last trading at $47.84 a barrel and Brent crude was at $52.41.

On the back of the weakness in the United States currency, gold prices rose to trade at $1,288.61 an ounce.

"The ECB chief will probably use the speech to congratulate himself on the recovery of the euro zone, thanks to the loose monetary policy", Madden said, "but he might use the relatively low inflation rate as an excuse not to talk about reining in the stimulus package".

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