Key events in developed markets next week

Markets will be closely scrutinising Fed Chair Jerome Powell’s comments at the annual get-together of central bankers at Jackson Hole this weekend, although we doubt there will be much new on offer. History tells us that the speeches tend to quite “high level” and academic, and generally offer few firm hints on the policy outlook.

So we doubt investors will glean much more on Powell's view of the recent escalation in trade tensions, the difficulties unfolding in emerging markets, or indeed his thoughts on President Trump’s recent comments about higher rates.

In any case, we still suspect the majority view of policymakers is that the current US economic momentum will continue to outweigh trade uncertainties – at least for now. We expect further rate hikes in September and December.

Germany will help set the scene this week for the ECB’s September meeting. The Ifo index should show whether German corporates took comfort from the visit by Jean-Claude Juncker to the US and a period of calm on the US-EU trade tension front, or whether the more general fear of a trade war still prevails. At the same time, German headline inflation is likely to hover around 2%, strengthening the ECB’s case for a dovish tapering.