FTSE 100 preview: Index looking up as investors await Jackson Hole speeches

FTSE 100 preview: Index looking up as investors await Jackson Hole speeches

She also said USA leadership of global efforts to coordinate regulation through the Basel Committee and the Financial Stability Board have made the system safer.

Investors were not expecting Yellen to make a policy statement anyway, but some market participants were hoping for some signal on the Fed's planned balance sheet reduction, if not on the outlook for USA interest rate hikes.

Instead, Yellen focused on US regulations, saying those put in place after the 2007-2009 crisis had strengthened the financial system without impeding economic growth, and any future changes should remain modest. This was the slowest rate since November, when prices gained 0.3 percent and also weaker than the expected 2.3 percent.

At a gathering of central bankers, economists and others in Jackson Hole, Wyoming, on Friday, Draghi said the global economy is firming up.

The US dollar index fell almost 50 points in the wake of the speech text having been released, to be quoted at month long low of 92.80, while the EUR/USD exchange rate surged almost 70 points to reach 1.1860.

Indeed, Yellen cited the likelihood of "the all-too-familiar risks of excessive optimism, leverage and maturity transformation re-emerging in new ways that require policy responses".

Following the last two increases in U.S. interest rates - in March and June - the market still expects later this year another 25 basis point increase to the Fed's target for the federal funds rate, which would take the range to between 1.25% and 1.50%.




The Commerce Department said durable goods orders plunged by 6.8 percent in July after surging up by 6.4 percent in June.

Yellen's predecessor, Ben Bernanke, signaled a new round of Fed bond purchases in 2010 to try to invigorate a weak USA recovery.

Many analysts say they think the Fed will keep raising rates at only a very gradual pace until it's confident that a recent puzzling slowdown in inflation reflects temporary factors and will reverse course as low unemployment starts boosting wages and spending.

The MSCI World index, which fell to a five-week low on Monday following days of turmoil at the White House, a deadly attack in Spain and worries over North Korea, was flat. The greenback is seen finding support around 1.29 against the pound and 1.19 against the euro. The index came in at 107.9 against the forecasts of 106.8.

"A turn towards protectionism would pose a serious risk for continued productivity growth and potential growth in the global economy", Draghi said in a speech that did not touch on current monetary policy.

Energy markets edged higher on Friday as United States producers braced for hurricane Harvey's impact on the Gulf Coast, with WTI for December delivery up 0.43% to $48.18/barrel and October benchmark brent higher by 0.25% to $52.22.

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