MNI US MARKETS ANALYSIS - Jackson Hole Takes Centre Stage

US TSYS SUMMARY: Fed Speakers Preempt Jackson Hole

Remote Jackson hole symposium kicks off at 1000ET today: Macroeconomic Policy in an Uneven Economy, Fed Chairman Powell making opening remarks after intro by hosting KC Fed pres George. Unlikely that Powell will 'pre-commit' to a taper timeline, expect to hear Powell repeat many recent talking points, and provide more clarity on some issues surrounding policy normalization. AGENDA

• Six Fed speaker interviews AHEAD of the Fed chairman: Bbg, CNBC interviews before the Fed chair speaks (see 0611ET bullet for Speakers).
• But wait, there's more: economic data on tap Adv Goods Trade Bal, Personal Income/spending, U-Mich sentiment. NY Fed buy-op of appr $2.025B Tsys 22.5-30Y.
• Geopol and Covid related headlines always an underlying risk factor for markets.
• Tsys trading steady to mixed, near the middle of a relative narrow overnight range on light volume if you take away Sep/Dec rolling (TYU1 drops to appr 140k!). US equities firmer (ESU1 +13.0 to 4479.5), US$ scales back some of Thu's support (DXY -.033).
• No Treasury auctions or corporate supply on tap, issuers on sidelines until next week. Sep Tsy options expiration should generate some decent trade.
• Current 2-Yr yield is unchanged at 0.2406%, 5-Yr is down 1bps at 0.8395%, 10-Yr is down 1bps at 1.3391%, and 30-Yr is down 1.4bps at 1.9331%.

EGB/GILT SUMMARY - Mainly flat heading into Fed Powell

A quiet start for EGBs and cross assets, as the street awaits Fed Powell at 10.00ET/15.00BST.

• Most markets are trading close to flat on the session.
• The standout is the BTP, which is outperforming Bund, in turn pushing the spread 1.3bps tighter.
• Gilts trade in a 18 ticks range (128.43/128.61), and are also flat in the early session.
• Looking ahead, US, Wholesale Inventories and PCE deflator are the highlight, while Michigan will be final reading.
• All eyes on Powell and many Fed speakers throughout the session.
• Gilt futures are up 0.01 today at 129.57 with 10y yields down -0.6bp at 0.594% and 2y yields down -1.2bp at 0.127%.
• Bund futures are down -0.02 today at 175.91 with 10y Bund yields down -0.6bp at -0.414% and Schatz yields unch at -0.740%.
• BTP futures are up 0.25 today at 154.01 with 10y yields down -1.8bp at 0.651% and 2y yields down -0.2bp at -0.489%
• OAT futures are down -0.01 today at 161.54 with 10y yields down -0.5bp at -0.58% and 2y yields up 0.1bp at -0.720%.

EUROPEAN ISSUANCE UPDATE

UK AUCTION RESULTS: DMO sells GBP3bln 1/3/6-month UKTBs

ITALY AUCTION RESULTS: 6-month BOT

FX SUMMARY: Awaiting Jackson Hole and Powell

• A calmer trading session for FX and across other assets, with investors waiting to hear from Fed Powell at 10.00ET/15.00BST.
• Most crosses have stayed within ranges.
• USD saw some downside extension, a small continuation from the overnight session, but USD has faded some of the losses at the time of typing.
• USD is up 0.12% against the SEK and down 0.24% versus the AUD.
• We had a few questions regarding a sudden bid going through in the British Pound, which wasn't fix related.
• It was unclear on the trigger, with no headline or new news seen crossing our screens.
• The move seems to have been led by the leg lower in EURGBP, but price action has since reversed.
• GBP is also mixed across G10.
• Looking ahead, out the US, Wholesale Inventories and PCE deflator are the highlight, while Michigan will be final reading.
• Although, these will likely be superseded by Powell.

FX OPTION EXPIRY

FX OPTION EXPIRY (updated, closest ones)

• EURUSD: 1.1700 (1.52bn), 1.1750 (781mln), 1.1765 (353mln), 1.1775 (1.53bn), 1.1800 (408mln), 1.1815 (754mln),
• USDJPY: 110 (810mln), 110.25 (240mln)
• AUDUSD: 0.7200 (293mln), 0.7250 (340mln), 0.7280 (269mln)

Price Signal Summary - Bund Futures Appear Vulnerable

• On the equity front, S&P E-minis are consolidating near recent highs and yesterday's pullback is likely a correction. This week's climb to a fresh all-time high confirmed a resumption of the uptrend and attention is on the 4500.00 handle. EUROSTOXX 50 key support has been defined at 4078.00, Aug 19 low. The outlook is bullish while this level holds.
• In the FX space, the USD remains in an uptrend and this week's weakness is still considered corrective. The recent move below 1.1704, Mar 31 low in EURUSD opens 1.1621 next, 1.00 projection of the Jan 6 - Mar 31 - May 25 price swing. Firm resistance to watch is 1.1805, Aug 13 high. GBPUSD remains vulnerable despite this week's bounce. The focus is on the bear trigger at 1.3572, Jul 20 low. Resistance is at 1.3768, Aug 26 high. The Aug 20 price pattern in USDCAD was a bearish shooting star candle and Monday's weak close reinforces the bearish pattern. An extension would expose 1.2522, the 50-day EMA.
• On the commodity front, Gold maintains a bullish tone following this week's breach of the 50-day EMA. The break signals scope for a climb towards $1834.1, Jul 15 high and a bull trigger. WTI futures support has been defined at $61.74, Aug 23 low. Note, Monday's price action was a bullish engulfing reversal candle, highlighting a positive short-term theme. Further gains would open $69.39. Aug 12 high.
• In FI, Bunds support at 176.21, Aug 11 low was cleared Wednesday, highlighting a short-term bearish theme. The focus is on 175.39, the 50-day EMA. Gilt futures appear vulnerable following recent weakness. An extension lower would open 128.03, Jul 6 low (cont).

EQUITIES: US equity futures moving a little higher ahead of Jackson Hole

• Japan's NIKKEI down 101.15 pts or -0.36% at 27641.14 and the TOPIX down 6.58 pts or -0.34% at 1928.77
• China's SHANGHAI closed up 20.493 pts or +0.59% at 3522.157 and the HANG SENG ended 7.8 pts lower or -0.03% at 25407.89
• German Dax up 1.31 pts or +0.01% at 15793.13, FTSE 100 down 1.56 pts or -0.02% at 7123.33, CAC 40 down 6.57 pts or -0.1% at 6659.73 and Euro Stoxx 50 up 3.3 pts or +0.08% at 4172.56.
• Dow Jones mini up 75 pts or +0.21% at 35236, S&P 500 mini up 13.5 pts or +0.3% at 4479.5, NASDAQ mini up 51 pts or +0.33% at 15324.

COMMODITIES: Higher, but off earlier highs

• WTI Crude up $1 or +1.48% at $68.46
• Natural Gas up $0.04 or +0.86% at $4.22
• Gold spot up $2.3 or +0.13% at $1794.75
• Copper up $2.05 or +0.48% at $428.2
• Silver up $0.04 or +0.17% at $23.6246
• Platinum up $10.22 or +1.04% at $992.68