Yellen's Valentine’s Date with the Congress

Daily Update - 14th Feb 2017

Yesterday’s Market

• NZD Electronic Card Retails Sales

Yesterday Explained

The only report worth mentioning was Electronic Card Retails Sales report from New Zealand which came out better than expected. Sterling inched higher against the U.S. dollar on Monday as political and economic uncertainties in the United States and Europe provided support to British Pound. Euro declined against the dollar on Monday as the dollar was lifted by increased hopes of U.S. tax cuts to stoke corporate profits and investments as well as bets on whether the Federal Reserve might raise interest rates more quickly.

U.S. Treasury yields rose on Monday as investors looked ahead to testimony by Federal Reserve Chair Janet Yellen on Tuesday and Wednesday and as record, high stock markets reduced demand for bonds.

Today’s Market

• EUR Harmonised Index of Consumer Prices, Consumer Price Index, Gross Domestic Product, ZEW Survey – Economic Sentiment, Industrial Production
• GBP Producer Price Index & Consumer Price Index
• USD Fed’s Yellen Speech

Today’s Focus

Early focus will be on economic data from Europe on where they will focus on several fields for Consumer price index along with Gross Domestic Product, ZEW Survey – Economic Sentiment & Industrial Production.

UK inflation is anticipated to show another jump up and is expected to hit 1.9%, just under the BoE’s target of 2%. If recent data releases from Britain are an indication, the CPI gauge could be well above their target, which could mean volatility for Sterling. Shortly after, the second reading of GDP from the Eurozone will be released and is due to be the same as the previous reading of 0.5%.

In the US, in the afternoon, the focus will be on Fed Chair Janet Yellen, who will be speaking before the Senate Banking Committee in Washington.  As always, markets will look to her remarks for clues as to the next action the Fed may take and when.