Up this week

20 Aug 2018

Up this week

Stateside, the highlight of the week will be the annual Jackson Hole Economic Symposium, which is set to host many of the world’s top central bankers.

The precise agenda and list of speakers for the symposium, which takes place 23-25 August, will not be published until 6pm Mountain Time on 23 August (1am our time on 24 August). Hopeully, the conference should give key central bankers the opportunity to discuss whether any coordinated policy response to the recent turmoil will be required and if so what. Of course, the attendees will also be considering other difficult issues with trade war concerns likely to feature heavily too. On this front, note that the US and China are set to go ahead with their latest tariff adjustments on 23 August; the US will impose a 25% tariff on another $16bn worth of Chinese goods, whilst the Chinese Ministry of Commerce has announced that the country would impose an equal tariff of 25% on $16bn worth of US goods coming into China.

UK this week

Following on from last week’s run of crucial UK data, things are a little quieter this week with tomorrows public sector borrowing numbers probably the highlight of the week. Brexit negotiations in Brussels last Thursday and Friday proved to be somewhat fruitless as the UK’s Brexit Minister, Dominic Raab travels to Brussels tomorrow with a view to reinvigorating discussions ahead of a series of UK technical Brexit papers which are due to be released on Thursday.

Europe & ROTW this week

In the Euro area we shall see the ECB account of its July policy meeting on (due 23 August). Data releases through the week will include the August preliminary PMIs for the Euro area on Thursday and ‘final’ Q2 German GDP figures on Friday. Amidst last week’s wave of risk aversion, all eyes will remain on Turkey and any contagion that may emanate from it. With the Turkish lira down over 30% on year opening levels, concerns have spread across the Emerging Market (EM) currency space, with the Indonesian, Argentinian and Hong Kong monetary authorities forced to intervene in various ways over the past week, in an effort to stem the slide in their currencies.
Turkey update

Turkey saw a double rating agency downgrade on Friday. S&P downgraded Turkey by one notch to B+, whilst the outlook was set at stable. S&P cited an expected recession next year and ‘extreme volatility’ in the currency as reasons for the downgrade. Meanwhile Moody’s downgraded Turkey to by a notch to Ba3, with a negative outlook, citing the weakening of public institutions (namely the central bank), and the lack of a ‘clear and credible plan to address’ the recent causes of financial stress as the rationale. Note that Fitch downgraded Turkey to BB a month ago, but it retains a negative outlook and comments on Friday suggest the rating may come under further pressure, with Fitch noting that policy moves were insufficient to restore policy credibility. Away from Friday’s rating action, reports this morning of gunshots being fired at the US embassy in Turkey will not help the situation. Somewhat surprisingly the Lira is relatively steady this morning trading a TRY 6.01 to the USD.

Bank of Ireland Group: New COO announced

Bank of Ireland announced on Friday that Jackie Noakes has been appointed as Chief Operating Officer (COO) for the group. Ms Noakes joins from UK financial services group Legal and General where she has held a number of senior management roles, most recently as CEO of Mature Savings. She has an extensive background in technology facing roles, including as Director of IT at Legal and General, with this being an important skillset to call upon given the likely focus the COO role will have in regard to the technology-laden €1.4bn transformation programme which BOIG is currently implementing. Ms Noakes is a graduate of the University of Limerick and replaces Lewis Love in the COO role after Mr Love left the group in March of this year.

Economic releases

16.00 US FOMC Member Bostic Speaks