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US Open Preview – Major pairs cautious ahead of Powell’s key testimony; European equities head lower
February 27, 2018 1:26 pmVideo
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Day Ahead: Fed new Chief Jerome Powell testimony takes the stage; durable goods & consumer confidence pending in US
The calendar will be busy in terms of economic data for the remainder of the day, however, the focus would turn to Jerome Powell and his first major speech before the House Financial Market Committee as head of the Federal Reserve where he will address the Fed’s semi-annual monetary report.
In times of stock market volatility, Powell who will testify on behalf of the FOMC committee at 1500 GMT (the prepared statements will be published at 1330 GMT) is expected to emphasize the bullish outlook of the economy as expressed at January’s FOMC meeting minutes, but probably he will avoid any reference on how fast interest rates should rise in order to keep markets calm, deterring another round of turbulence in equity markets.
Data on durable goods for the month of January will also attract attention at 1330 GMT, with analysts expecting the headline and the core measures to slow down on a monthly basis. At 1400 GMT, the CaseShiller indices gauging house prices during the month of December will be made public, while data on consumer confidence for the month of February will be released at 1500 GMT. The consumer confidence index is expected to rise to 126.6, coming closer to November’s 18-year high of 128.6.
In Eurozone, Germany will deliver flash estimates on consumer prices for the month of February at 1300 GMT. Forecasts are for the headline CPI to inch down to 1.5% y/y, however, in monthly terms, the index is projected to jump by 0.5% after experiencing the biggest drop of 0.7% in almost two years. In Sweden, Fellow Riksbank Deputy Governor Henry Ohlsson will be discussing the Swedish central bank’s tasks and his view of Swedish and international economic developments at 1700 GMT.
Oil traders will be paying attention to the API’s weekly data on crude stocks due at 2130 GMT.
In equities, corporations continue to release quarterly earnings reports, though the markets’ focus is expected to be on what Powell has to say later on Tuesday.
Brexit developments are also gathering attention as UK PM Theresa May prepares to deliver a speech on the nation’s relationship with the EU after Brexit later in the week. In politics, NAFTA negotiations, which have entered their seventh and final round, will also be attracting interest.
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