Central Bankers See Inflation Rising

The two day annual Central Banker's symposium at Jackson Hole concluded on Saturday with Central Bank Governors from across the world participating. Many were of the view that inflation could start to rise sooner than later, providing justification for tightening monetary policy accordingly. The theme for this year’s Jackson Hole Symposium was titled “Inflation and Market Dynamics.” The Federal Reserve's Vice Chairman Stanley Fischer noted that given inflation was steady there was a good reason to expect inflation to rise as the downward pressure on inflation starts to dissipate. Fischer’s comments also sparked some momentum in the dollar after stating that inflation would not need to rise back towards the long-term target before more hawkish policy measures were initiated. Besides Fischer, the ECB's Vice President Vitor Constancio and Governor Mark Carney from the Bank of England echoed the same views. However, Fischer refused to elaborate further on the Fed's September 17th FOMC meeting.

The economic calendar today is quiet with no major news releases expected. Financial markets in the United Kingdom are closed on account of the Summer Bank Holiday and in the European trading session, the German retail sales and the Eurozone Flash CPI data are the only two major news releases worth noting. German retail sales declined by -2.3% last month after rising to yearly highs of 2.9% in March of this year. The flash CPI estimates for the Eurozone is expected to show inflation staying muted at 0.2% on the headline and at 1.0% for the core figure. Eurozone core inflation has been steady after staying flat at 0.6% until April this year before settling between 0.9% and 0.8% since April. The ECBs bid to stoke inflation and revive growth has largely had limited impact since the inception of asset purchases. The flash CPI estimates comes ahead of the ECB’s monetary policy meeting later in the week.