Powell back for round two

March 1, 2018

Another busy day for markets and announcements, with plenty of data for traders to sink their teeth in to.

The Dow got belted yesterday as the index struggles with talk of faster interest rate rises. It is now in a precarious period as markets await Fed Chair Jerome Powell’s second testimony in front of Senate Banking Committee. The Dow started the session flat yesterday, meandering on for the first few hours before climbing to session highs of 25,575.00. From that point on however, it was mainly all downhill. The Dow’s steep decline meant it dropped over 550 points to hit session lows of 25,015.20. It has come off those lows slightly, currently trading at 25,088.10. The Dax held up reasonably well during the trading session, but was eventually dragged down by the Dow. The Dax ebbed and flowed until it climbed to session highs of 12,518.20. But like the Dow, after the Dax reached session highs, it was all bad news. It shed over 150 points to hit session lows of 12,361.97. It is virtually at those lows now, trading at 12,366.80.

The EUR/USD showed further signs of weakness as investors flocked to the USD in the face of plummeting markets. After reaching a high of $1.22412, the pair dropped off to go as low as $1.21864. It is not far off those lows, currently trading at $1.21928. The GBP/USD fall was more pronounced. Going from highs of $1.39160, it steadily lost ground for the remainder of the session, hitting lows of $1.37479. It is near session lows currently, trading at $1.37534.

Markets are eyeing off Jerome Powell’s second testimony of the week as he fronts the Senate Banking Committee tomorrow morning. The last testimony that he gave two days ago sent markets spiralling downward as he suggested higher interest rates will likely be a reality far quicker than what was suggested by his predecessor, Janet Yellen. Markets will cautiously watch to see if this testimony has the same effects as the last one. Other data set for release today includes:

Australia – Private Capital Expenditure, Commodity Prices

Japan – Final Manufacturing PMI, Consumer Confidence

NZ – Building Consents

China – Caixin Manufacturing PMI

Canada – Current Account, Manufacturing PMI

UK – Nationwide HPI, Manufacturing PMI, Net Lending to Individuals, M4 Money Supply, Mortgage Approvals

US – Core PCE Price Index, Personal Spending, Unemployment Claims, Personal Income, Final Manufacturing PMI, ISM Manufacturing PMI, Construction Spending, ISM Manufacturing Prices, Natural Gas Storage, Total Vehicle Sales

Europe – Swiss GDP, Swiss UBS Consumption Indicator, Swiss Retail Sales, Swiss Manufacturing PMI, Italian & Spanish Manufacturing PMIs, European, German & French Final Manufacturing PMIs, Italian Monthly Unemployment Rate, European Unemployment Rate


Disclaimer: The views expressed in this blog are those of the author only. Opinions offered in this blog are no guarantee of market direction and performance. Traders/Investors should not rely on this blog alone for their market information. This blog is not an indicator of market direction and performance. Trading the forex market is high risk and losses can exceed deposits.