SUBDUED VOLATILITY AHEAD OF THIS WEEK'S KEY EVENTS

Here is what you need to know on Monday, August 21:

Markets started the new week in a quiet manner, with major currency pairs trading near Friday's closing levels. Germany's Bundesbank will publish its monthly report and the US economic docket will feature the Federal Reserve Bank of Chicago's National Activity Index for July later in the day. High-impact data releases and speeches from central bankers at the annual Jackson Hole Symposium will likely ramp up volatility in the second half of the week.

China's central bank, the People’s Bank of China (PBoC), announced in the Asian session that it lowered the one-year Loan Prime Rate (LPR) to 3.45% from 3.55% previous, while keeping the five-year LPRs unchanged at 4.20%. Markets were expecting both rates to be lowered by 15 basis points. Hong Kong's Hang Seng Index is down nearly 2% on the day following the interest rate decisions and the Shanghai Composite Index is losing 1%. In a statement published over the weekend, the PBoC said that "China will coordinate financial support to resolve local government debt problems," per Reuters.

The US Dollar Index (DXY) registered gains for the fifth straight week last week. Early Monday, DXY holds steady at around 103.50. In the meantime, the benchmark 10-year US Treasury bond yield stays near 4.3% and US stock index futures trade flat on the day