(Repeats Friday item)
Aug 22 (Reuters) - Following are five big themes likely to dominate the thinking of investors and traders in the coming week and the Reuters stories related to them.
Markets have been blown this way and that in recent weeks by comments from U.S. Federal Reserve officials on the likelihood or at least the merits of higher U.S. interest rates. The minutes of the central bank’s July rate-setting meeting showed policymakers split. That split has been reflected in the breadth of opinion expressed by individual policymakers. So the market will focus on what Fed Chair Janet Yellen has to say at the Jackson Hole central bankers’ symposium on Aug. 26. Any suggestion of higher rates by year-end can be expected to give the dollar a boost. Markets see about a 50 percent chance rates will rise in December, according to the CME Group’s Fedwatch tool. Yellen’s remarks will not be the last word before the Fed’s next meeting on Sept. 20-21 but may be the highlight of the coming week. Some policymakers want more data before taking any decision to hike. The coming week’s data calendar bring revised second-quarter GDP and flash August readings on factory and services industry activity.
* Fed policymakers divided over whether to raise rates soon
* U.S. data calendar
* COLUMN-Huge increase in the range of the possible in economic policy
The yen has strengthened towards the 100 per dollar mark, triggering a bout of verbal intervention from the Japanese authorities. Given uncertainty over when the Federal Reserve will raise rates and higher dollar borrowing costs, as highlighted by dollar LIBOR rates, which are driving companies to sell dollars and exchange them for currencies with lower rates like the euro and the yen, upward pressure on the Japanese currency is unlikely to abate in the near term. As such, intervention by the Japanese is likely to be forlorn, with many analysts expecting the yen to trade towards 95 per dollar by the end of the year.
* Japan exports tumble most since financial crisis, policymakers meet over yen moves
* Japan sinking deeper into de-facto helicopter money
* Japan’s economic woes deepen as manufacturers’ mood hits three-year lows
* PREVIEW-Japan July consumer prices seen likely to fall on energy costs and firm yen
The week ahead brings further clues on the state of Europe’s economy after Britain voted to leave the European Union. Monday sees the release of the closely followed flash August PMI data for the euro area, followed by Germany’s Ifo business sentiment survey on Thursday. In a sign that the effect of Brexit could be limited, a survey by Germany’s ZEW Institute last week showed the mood among German analysts and investors improved slightly. There’s also been little immediate impact on Britain’s labour market, since UK retail sales jumped in July. Any signs that Europe’s economy is also holding up well may ease pressure on the ECB to loosen monetary policy again when it next meets in early September.
* German investor morale brightens slightly in August
* ECB keen to keep stimulus hopes in check at meeting after Brexit vote
* British shoppers defy Brexit shock as spending jumps in July
* UK labour market shows little sign of immediate Brexit hit
For those trying to balance Russia’s books there has been good news and bad in recent days. The good news is that the price of oil, a major Russian export, popped back above $50 a barrel for the first time since early July. Russia’s budget assumes a $50 oil price but, before the latest rise, it had only been above that level for a month in 2016. Less good was the delay to the privatisation of oil-producer Bashneft. The sale was not part of the budget plan, but the 300 billion roubles it was expected to bring in would have come in handy to help fill the hole left by cheap oil. A sale of a 19.5 percent stake in another oil producer, Rosneft, is in the budget and some analysts worry that if the Bashneft sale can be delayed, so can the bigger one. Keeping the budget deficit to its 3.0 percent target may just have become more difficult, especially if the government decides to raise pensions for a second time this year before parliamentary elections in the autumn.
* Russia takes budget gamble by shelving Bashneft stake sale
* Russian oil firm sale delay seen reflecting Kremlin pre-election unease
* Putin hints at war in Ukraine but may be seeking diplomatic edge
The European second-quarter corporate earnings season is coming to a close. So far, nearly 60 percent of companies have met or beaten earnings per share targets, Sounds good? Less so, considering EPS has fallen by 12 percent this year. This was in line with analysts’ rather gloomy forecasts.
* Investors see British infrastructure getting stimulus boost after Brexit
* European earnings: Persimmon Aug. 23, Carillion, WPP, Glencore Aug. 24, Playtech, Koninklijke Ahold, Vivendi Aug. 25
Compiled by Nigel Stephenson, editing by Larry King