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Friday, 26 Aug 2016
21:30
Source: RANsquawk
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Friday, 26 Aug 2016
21:00

Yellen’s speech at today’s Jackson Hole Symposium was initially viewed as hawkish, as she reiterated recent comments from Fed members that the case for a hike has risen recently. ‘Reiterate’ is the objective word however, as she fell well short of offering any forward guidance, preferring to instead to talk-up the domestic economy. It was left to Vice Chair Fischer to clarify who said that Yellen’s words were consistent with a potential hike in September causing the USD to strengthen and UST yields to rise. CME Futures pricing shifted sharply in favour of a hike at both September (21% to 36%) and December (41.4% to 46.1%) meetings; November moved in line with the other two but is viewed as unlikely given its proximity to the election.

Sharp choppy trade in treasuries throughout the session, amid continued tin summer conditions. The complex ended much lower given the hawkish fed and given the belly took the brunt, the curve closed flatter. 10y Sep’16 T-note futures closed lower by 22 ticks at 131.12. Given yields rising, yield play sectors Telecoms and Utilities severely underperformed and dragged indices lower. The NASDAQ outshone its peers, although only slightly, managing to finish in positive territory being bereft of the worst performing Utility names. DJIA finished lower by 0.29% at 18,395.40, S&P lower by 0.16% to 2,169.04 and Nasdaq 100 higher by 0.17 at 4,783.69.

Focus next week will be on continued fall-out from the Jackson Hole symposium. We also expect tier one data including Nonfarm Payrolls and Central Bank speakers from the ECB and Fed give participants plenty to look forward to.

Source: RANsquawk
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Friday, 26 Aug 2016
19:35
Source: Newswires
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Friday, 26 Aug 2016
19:34

TIME: 1500BST/0900CDT

NEWS: Fed's Yellen states rate hike case has strengthened in recent months and economy is nearing the Fed's inflation and employment objectives. RANsquawk analysts were quick to highlight the initially hawkish take of the report given that Yellen said the case for a rate hike had strengthened and how bullish Yellen was on the US economy. However, RANsquawk analysts then explained that although initially it appeared to be hawkish, there was no explicit mention of September and was not as hawkish as other recent rhetoric from the Fed. This interpretation of the speech was also enhanced by market pricing of a September rate hike falling from a 30% chance to a 26% probability.

REACTION: In an immediate reaction, EUR/USD fell 66 pips from 1.1306 to 1.1240, while T-Note Sep'16 futures fell 13 ticks from 132.05 to 131.24. Elsewhere, E-Mini S&P Sep'16 futures fell 6 points from 2176 to 2170, before rising 10 points to 2180 due to positive comments on the economy. Thereafter, upon the less hawkish than initially thought interpretation of the speech, markets saw a full reversal and extended the move above pre-announced levels.

Source: RANsquawk
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Friday, 26 Aug 2016
19:32
  • Herbalife (HLF) (1230BST0730EDT) – Billionaire investor, Carl Ichan was recently in talks to sell his 18% stake in the Co. to a group that includes hedge fund manager Bill Ackman. Furthermore, Ackman has confirmed that Carl Ichan offered to sell his stake in the Co. and states that he was contacted by Jefferies in August as the firm were trying to put together a block trade to purchase Ichan’s stake in the Co. (Newswires/WSJ)
  • Raxspace (RAX) (1230BST/0730EDT) – The Co. is to be acquired by Apollo Global (APO) for USD 32.00/shr. (Newswires)
Source: RANsquawk
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Friday, 26 Aug 2016
19:32
Friday, 26 Aug 2016
19:30
Source: RANsquawk
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Friday, 26 Aug 2016
18:57
Tags: US Session
Source: Newswires
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Friday, 26 Aug 2016
18:55
Friday, 26 Aug 2016
18:50
Friday, 26 Aug 2016
18:38
Source: Newswires
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Friday, 26 Aug 2016
18:01

- Oil Rig Count (Aug 26) W/W 406 (Prev. 406)

- Gas Rig Count (Aug 26) W/W 81 (Prev. 83)

Source: Newswires
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Friday, 26 Aug 2016
17:39
Source: Newswires
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Friday, 26 Aug 2016
16:54
Analysis details: 17:02

- In terms of FX markets, USD index has continued to strengthen in the wake of this latest commentary with USD/JPY consolidating above 101.00 while the USD strength has also filtered into the commodities complex with gold prices hovering near session lows.

- Additionally, equities and T-notes have pared their earlier advances with the latter weighed by the recent upside in yields, while notable underperformance has been seen in the short end.

Source: RANsquawk
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Friday, 26 Aug 2016
16:39

- Fischer also states that the Fed remain data dependent and that a rate hike, or hikes is possible this year. 

Analysis details: 16:42

- Yellen previously stated that a rate hike case has strengthened in recent months and economy is nearing the Fed's inflation and employment objectives

Reaction details: 16:42

- In a reaction to the latest commentary from Fischer further upside has been seen in the dollar index, with USD/JPY now above 101.00. The E-mini S&P is trending lower along side T-notes. 

Source: Newswires
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Friday, 26 Aug 2016
16:36
Friday, 26 Aug 2016
16:30
Source: Newswires
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Friday, 26 Aug 2016
16:20
Friday, 26 Aug 2016
16:01

The August lull continued for much of this week, with volatility particularly muted, accompanied by light newsflow. Much of the session was spent awaiting comments from Fed’s Yellen, with recent rhetoric from the likes of Fischer and Dudley striking a more hawkish tone and market participants speculating as to whether Yellen may follow suit. Rhetoric from Yellen saw a fast money move higher in the USD, after she stated that rate hike case has strengthened in recent months and economy is nearing the Fed's inflation and employment objectives. However, the USD strength was short lived given the lack of a specific mention of September, combined with the quantity of data still due from the US ahead of the next FOMC meeting on September 21st.

Elsewhere, one of the more notable movers this week saw significant upside in USD/ZAR amid uncertainty over the future of the Finance Minister after reports stating that the police have summoned him over an investigation into a suspected rogue spy unit in the tax service. NZD has also seen focus this week, with NZD/USD trading higher by around a point by Friday after RBNZ governor Wheeler who warned against rapid rate cuts and stated immediate easing is unnecessary.

Looking ahead to next week, it appears USD is set to remain in focus, with a host of Fed speakers scheduled as well as the latest nonfarm payroll report. Given Yellen’s tone, the upcoming data and rhetoric will take on a heightened significance, as to the legitimacy of a possible September rate hike is tested. Elsewhere, next week also sees CPI readings from Germany and the Eurozone, as well as manufacturing PMIs from across the globe.

Source: RANsquawk
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Friday, 26 Aug 2016
15:52

Full speech here

Analysis details: 15:54

- This was taken from the conclusion of the speech, with the conclusion failing to mention anything specific on BoE monetary policy. 

Source: BoE
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Friday, 26 Aug 2016
15:49
Source: Twitter - Journalists
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Friday, 26 Aug 2016
15:30
Source: Newswires
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Friday, 26 Aug 2016
15:30
Source: Newswires
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Friday, 26 Aug 2016
15:28
Analysis details: 15:32

- Rumours have been reporting this for a few hours, however it is now gaining more traction on Twitter.

Source: Newswires
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Friday, 26 Aug 2016
15:16
Analysis details: 15:18

- Given that the major event of the week has now passed, some have suggested that the Yellen reaction is more of a fast money move, with some participants unwilling to leave positions on over the weekend, particularly with the UK seeing an extended bank holiday weekend.

- Commentators also note that while comments on the economy and particularly employment were upbeat, plenty of data is still scheduled ahead of the rate decision on 21st Septembet including next week's nonfarm payroll report.

- Probability of a rate hike in September has fallen, with Fed Fund Futures now pricing in 26% vs Prev. probability of 30% of a September rate hike. 

Source: RANsquawk
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