Financial markets continue to play the sideways game, remaining susceptible to news flow and data. With very little data out last week activity was more subdued than normal. One excuse for the lack of activity last week could have been the attention many placed on catching the first solar eclipse on US soil since 1979, or the fact that global central bankers were meeting at their annual Jackson Hole Economic Policy Summit in Kansas City on Friday night our time. The more probable excuse was the lack of significant economic data releases last week however, that said, Donald Trump gave a couple of speeches (yes speeches and no tweets) that did produce some market volatility.
For the records, markets were disappointed with the Jackson Hole summit as the much anticipated speeches from Janet Yellen and Mario Draghi provided no clear direction, their commentary staying well clear of discussing the immediate outlook for monetary policy in the US and Europe respectively.
Locally, politics (especially the “citizenship saga”) and weak wages are staying in the headlines for now and this is doing little to create a lift in consumer attitudes at the moment. The futures market remains reluctant to price in any move in rates given the absence of a shift in data. Market pricing for no move in rates till late next year reflects the continued resilient housing market, business confidence and commodity prices, but is capped by weak consumer confidence, wages and the strong Australian Dollar.