Morning Wrap 25 August 2017

Markets traded fairly narrowly just ahead of the Jackson Hole Symposium, with Janet Yellen speaking – possibly for the last time – Friday morning. Observers will be keen to see whether the Fed Chair references the persistent lack of inflation, and what sort of course she will chart for the Fed towards normalisation. The Dollar index moved higher to 93.277 and 10 year yields increased slightly as uncertainty over the debt-ceiling grew. Donald Trump has been tweeting his displeasure with senior Republicans over the ‘mess’ the debt ceiling has or may become. So far, concerns still seem muted basis activity over in fixed-income.
 
The XAUAUD moved slightly lower and is expected to see nearby support at A$1626, with further support at A$1613 and A$1604. It is worth noting that option pricing and CME futures positioning are both bullish for the AUD, with CME long speculative positioning the largest since February of this year, and risk-reversal signalling an increase in  bullish trader sentiment for the AUDUSD recently.
 
XAUUSD weakened slightly and is expected to see support at the Daily Turning Line at US$1284, then at US$1278. Look for Core durable goods in the US (expected to be 0.40 per cent) in a day otherwise fixated on Wyoming.
 
Good luck today!