Jackson Hole – another consideration for the Kiwi - Nomura

Analysts at Nomura, after earlier commenting on how stretched the Kiwi probably is, they note that a more near-term focus for the NZD and broader markets is the annual Jackson Hole Symposium, particularly the scheduled speeches by Fed Chair Yellen and ECB President Draghi. 

Key Quotes:

"Chair Yellen is due to discuss “Financial Stability”. According to our US economists, she could address the current easing financial conditions, and based on a comment from the recent FOMC minutes could argue that the need to promote financial stability may be another reason for the FOMC to increase its targets for short-term interest rates later this year, even if inflation is slow to pick up. 

If delivered, this message could be seen as relatively hawkish by the market. And high-yielding G10 currencies, particularly with still stretched positioning such as the NZD, appear susceptible to a rise in US yields and/or pick-up in market volatility."