All the talk this week has been about Powell's speech at Jackson Hole but the agenda for the symposium was released late yesterday and it includes a speech from ECB President Christine Lagarde.
Powell speaks at 10:05 am ET and she's much later at 3 pm ET and speaking on the "European and Global Economy".
I don't see a reason for Powell to stray from his 'wait and see' stance at the moment but the ECB may need to change course. Market pricing is now right at 50/50 for a Sept 14 rate hike and there was a leak to Reuters today, citing 'eight sources with direct knowledge' that "European Central Bank policymakers are increasingly concerned about deteriorating growth prospects and, while the debate is still open, momentum for a pause in its rate hikes is building."
There's a good chance that leak came to soften the surprise of what Lagarde will say today.
Today's German Ifo survey added to the case for a pause with a decline to 85.7 from 87.4. It's one of many signs of a slowdown, particularly in Germany.
What Lagarde might signal is something like the Fed is doing -- slowing the pace of hikes and skipping a meeting. That would leave options open for the October 26 meeting, where the market signals a 70% likelihood of a hike.
If Lagarde signals a dovish shift, it will come late in the day and could weigh on the euro. The caveat is that the initial leak dip has been bought, highlighting that the market may be more worried about the growth side of the equation.
