US AM Digest: Traders Wait for Powell to Climb the Capitol
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The Jerome Powell era begins in earnest today as the new Fed Chair is set to appear in front of the US House Financial Services Committee for the first time. Yet as market participants eagerly await hearing from Fed Chair Powell, market expectations for any significant move today around the commentary are extremely low: options markets are implying less than a 1% move in any USD-pair during the course of today’s session. Given that markets are effectively pricing in Powell to be version 2.0 of Janet Yellen – thereby continuing her FOMC’s path of monetary policy – it would take a surprise comment akin to Yellen’s 2016 slip-up regarding the legality of negative interest rates to provoke a significant move (a comment she walked back at her next appearance).
DailyFX Economic Calendar: Tuesday, February 26, 2018 – North American Releases
Tuesday has already proven to be an exceptionally busy day on the North American calendar, particularly for the United States. The data released has been less than reassuring for the US economy, however. The Trade Balance deficit grew in January, despite ongoing rhetoric from the Trump administration that it would like to see the deficit eliminated. Durable Goods Orders, a proxy for consumers’ financial health, dropped more than anticipated. Home prices’ gains appear to be stalling as well – a trend we’ll want to watch as interest rates and mortgage rates have risen since December. Fed Chair Jerome Powell is set to speak in front of the US House Financial Services Committee today at 10 EST/15 GMT.
DailyFX Webinar Calendar: Tuesday, February 26, 2018
Five Things Traders are Reading
- “US Dollar Waits on New Fed Chair Powell - Expectations are Low” by Christopher Vecchio, CFA, Senior Currency Strategist
- “South African Cabinet Reshuffle: the Good, the Bad and the Rand” by Shaun Murison, CFTe, Technical Strategist
- “Market Sentiment in Neutral But Busy Week Ahead for Confidence Indicators” by Martin Essex, MSTA, Analyst and Editor
- “Gold Price Retests Chart Resistance But USD Dominates” by Nick Cawley, Analyst
- “Crude Oil, Gold Prices May Fall on Hawkish Fed Chair Powell” by Ilya Spivak, Senior Currency Strategist
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