US, Euope in focus as Janet Yellen testifies

November 17, 2016

Quite a busy day as far as announcements go, with most of the action occurring later tonight and into the early hours of tomorrow morning.

Most of the data being released today/tomorrow morning is coming out of the US. This set of data includes: Building Permits, CPI, Core CPI, Philly Fed Manufacturing Index, Unemployment Claims and Housing Starts. Building permits is a measure of new residential building permits being granted. This is important and it reflects the strength of the housing sector (along with Housing Starts data). The CPI figures reflect consumer spending habits and consumer confidence in the economy. The Manufacturing Index helps us gauge the strength of the manufacturing sector. Unemployment claims gives us a signal of the relative strength or weakness of the US jobs market.

Meanwhile, there are a few Fed members (FOMC) speaking. They include William Dudley, Lael Brainard and Fed Chair Janet Yellen is due to testify about the US economic outlook before the Joint Economic Committee in Washington. These speeches (particularly Yellen’s) are crucial as they can indicate what the Fed Reserve is thinking in the way of monetary policy in the future. As markets are factoring in a more than 75% chance of the central bank raising rates in December, it will be interesting to see if their language regarding interest rates is in line with what the market is expecting.

Europe is releasing a few pieces of data later tonight. This includes: Italian Trade Balance, European Final CPI & Core CPI. Trade balance shows the difference in value between imports and exports. As with the US, the CPI figures reflect consumer confidence and spending habits. Meanwhile, the ECB is releasing its Monetary Policy Meeting Accounts. This is a more detailed look at their previous monetary policy meeting.

Elsewhere, the UK are releasing Retail Sales figures and Canada are releasing Foreign Securities Purchases data.