mask Markets Gear up for Powell’s Testimony

27/ 02/ 2018

Markets Gear up for Powell’s Testimony

Daily Update - 27th February 2018

Yesterday’s Market

  • EUR ECB President Draghi’s Testimony
  • USD New Home Sales & Dallas FED Manufacturing Business Index

Yesterday Explained

Mario Draghi gave his testimony on monetary policy and the inflation outlook before the European Parliament Economic and Monetary Affairs Committee yesterday but market anticipation of a strong dollar performance ahead of FED Chair Jerome Powell’s Testimony did not move the markets in Euros favor.

US New home sales came out negative while Dallas FED manufacturing figures came out better than expected. The pound rose against a weaker dollar as expectations of UK rate hike increased further as BOE deputy Governor mentioned that; interest rates will need to rise faster than was previously assumed given that inflation remains at 3% and wage pressures are on the rise.

Today’s Market

  • EUR Industrial Confidence, Economic Sentiment Indicator, Harmonised Index of Consumer Prices
  • USD FED’s Powell Speech, Durable Goods Orders & Housing Data

Today’s Focus

Today’s the biggest volatile day of the week, as Jerome Powell will be making his first appearance as the FED chair. He will testify before the House Financial Services Committee in Washington DC on the Semiannual Monetary Policy Report.

By Mid-day, we will see Industrial confidence from euro zone along with few economic surveys. These surveys will give an indication as to how confident the consumers are about the euro zone economy. Then the focus shifts to Germany with the release of Harmonised indexes which shows the German inflation.

Then comes the testimony from FED Chair Jerome Powell which will be scrutinized for his take on recent market developments, Outlook on inflation & growth and his position on more rate hikes. This will be followed by Durable Goods which measures the cost of orders received by manufacturers for durable goods such as motor vehicles and appliances. The day will end with the release of two indexes which shows the housing price movements in USA.