Fed Speakers in Wyoming and an OPEC Attendee in Algiers

August 26, 2016

For all the negativity that CNBC cops on finance Twitter, you have to give them credit for delivering these Fed comments on a platter for us.

Golden interviews with Dallas Fed President, non-voting member Robert Kaplan and Kansas City Fed President, voting member Esther George were streamed and wrapped up nicely online, watchable in full at the links here.

I’ve extracted some key quotes from each of the speakers here, but it’s highly recommended you watch the videos. Listening to them speak in this way really does open up doors into the mind of the Fed.

Kaplan:

Fed's Kaplan on CNBC interviewed at Jackson Hole

“We’re making progress on the employment front. And labor slack is coming out of the labor market.”

But…

“One jobs report is not going to drive our thinking [but] I do believe the case for removing accommodation is strengthening.”

“We’re [also] making frustratingly slow progress, but some progress on inflation.”

It wouldn’t be a central banker without some form of contradiction in their rhetoric, but as we said yesterday, ‘where there’s smoke, there’s often fire’ and I’m seeing a tonne of black, rate hike smoke billowing from my computer screen!

George:

Fed's George on CNBC interviewed at Jackson Hole

“I do think it is time to move that rate. It doesn’t mean I favor high rates. It doesn’t mean I think it needs to happen rapidly.”

“But under conditions when we’re seeing employment move [higher with] low and stable inflation, I think it’s fair to say we could remove some of that accommodation.”

*Cough Cough Cough* – Jeeze, it’s getting smoky in here!

And this is all before Janet Yellen speaks tonight. Phworr!

USDX Daily:
160826_usdx_daily
Click on chart to see a larger view.

With the US Dollar Index still sitting at higher time frame support, I still see the greater risk reward and ability to take advantage of the chance of a market re-pricing coming by playing USD from the long side.

Having a USDX chart side by side with any of the major Forex pairs that you trade is always a good idea, especially going into a major USD sensitive event such as Jackson Hole. If your broker doesn’t allow you to watch USDX, make the switch.

Funnily enough, there is financial market action happening outside of that small valley in Wyoming!

Go polar opposite climates, into North Africa, where we saw Oil reacting to headlines that Iran’s Oil Minister, Bijan Namdar Zanganeh, will be attending OPEC meetings next month in Algiers.

“I will participate in this meeting.”

However, according to the Iranian oil ministry’s news service, Shana, he didn’t comment on the position Iran will take at the talks.

Markets know the significance of the Saudi/Iran relationship when it comes to the price of Oil moving forward and markets are taking Iran’s attendance at these meetings as a bullish sign.

Just keep in mind that these OPEC talks are merely informal, and by reading the Iran/Saudi history in the blog post linked above, you can see that productions caps to ‘stabilise the market’ are not simply going to be agreed upon on a whim.

OIL 4 Hourly:
160826_oil_4hourly
Click on chart to see a larger view.

What a Friday night. Stay safe out there!

———

On the Calendar Friday:
ALL Jackson Hole Symposium
GBP Second Estimate GDP q/q

USD Prelim GDP q/q
USD Fed Chair Yellen Speaks

Trade with ECN Forex broker, Vantage FX.

Dane Williams – @VantageFX

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