Markets quiet ahead of Yellen’s speech on Friday - BBH

Research Team at BBH, notes that the markets are quiet ahead of Yellen’s speech, as the summer doldrums take hold. 

Key Quotes

“During the North American session, the US reports August Markit manufacturing PMI and Richmond Fed manufacturing index, as well as July new home sales.  There are no Fed speakers ahead of Chair Yellen’s Jackson Hole speech.  She is slated to talk at 10 AM ET on Friday, and we expect her to take a similar tone to Dudley and Fischer.

Yet the recent dollar bounces from hawkish Fed comments have been fleeting.  We saw this with Dudley last week and now Fischer this week.  Can Yellen break the pattern?  As we’ve noted before, the dollar has softened despite the steady recovery in Fed tightening expectations.  The implied yield on the December Fed funds futures contract stands at 0.50%, the highest since June 9.”