Stock markets had headed sharply higher while the dollar was choppy on Monday, ahead of a slew of US economic data, with the immediate focus being on the Fed’s Chairman Jerome Powell’s testimony to Congress later today/tomorrow. Stocks seem to have taken their lead from comments by St. Louis Federal Reserve President James Bullard, who said that substantially higher interest rates could risk a policy that is too tight for the current economy, and investors took that as a hint that rates may not rise as sharply as has been recently speculated. In other markets, the metals and oil have also traded sideways ahead of Powell’s testimony.
Tuesday will begin with the release of the NZ Trade Balance for Jan and the Australian New Home Sales although that will be it from Asia, while Europe will focus on the Preliminary German CPI (CPI, exp 0.5%mm, 1.5%yy; HICP, exp 1.3%yy) and the EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment and Business Climate. After that, the US will have a busy, and possibly volatile, session with the January Durable Goods Orders (exp -2.0%mm, ex Auto exp +0.2%mm), the Case Shiller House Price Index (exp 6.2%), Wholesale Inventories, Richmond Fed Mfg Index, House Price Index, the API Weekly Crude Oil Stock Inventory and finally (and most importantly), a speech from the Fed’s Jerome Powell who will be testifying to Congress although nothing new is expected to come from him, following on from last week’s Monetary Policy Statement.
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