The week ahead awaits key US data - UOB

Analysts at UOB Group  explained that the focus on Friday was Fed Chair Janet Yellen’s address at the Jackson Hole symposium. In the muchanticipated speech, Yellen voiced optimism about the US economy and an expectation that interest rate hikes were ahead.

Key Quotes:

"In fact, her speech was not entirely surprising and the only reference of relevance to near-term monetary policy matters was: “I believe the case for an increase in the federal funds rates has strengthened in recent months.” Yellen’s remarks were not accompanied by any time-dependent language, whilst all but 2 of just over 17 pages of text were devoted to longer run issues concerning future policy flexibility.

The August employment report headlines a full economic data docket in the US this week, and this could meaningfully impact market expectations on the near-term trajectory of monetary policy. Recent comments from numerous Fed officials, including Fed Chair Yellen, have kept the prospect of a rate increase this year on the table. Beginning on Monday, personal income/spending data for July will be released. On Tuesday, markets receive S&P/Case-Shiller home prices for June and consumer confidence releases for August.

As always, Wednesday's ADP private employment report will influence market expectations going into Friday's non-farm payrolls report. The Chicago PMI for August and pending home sales releases for July will be rolled out mid-week as well. On Thursday, markets receive non-farm productivity/unit labor costs for 2Q16, as well as ISM manufacturing and vehicle sales data for August. Trade balance and factory order releases for July will finish off the week, but the key focus will obviously be on the employment situation for August, including the widely-watched non-farm payrolls. We think the US is likely to add 250k jobs in August (the median forecast is lower at 180k)."