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Market Snapshot – Markets Await Yellen’s Testimony

By:
FX Empire Editorial Board
Updated: Mar 4, 2019, 13:25 UTC

Oil Prices rise as Traders Focus on Increasing OPEC Compliance Crude Oil is called higher shortly before the regular session opening. There was no

Market Snapshot - Markets Await Yellen's Testimony

Oil Prices rise as Traders Focus on Increasing OPEC Compliance

Crude Oil is called higher shortly before the regular session opening. There was no follow-through to the downside after Monday’s steep sell-off and the market is trading inside yesterday’s range. This typically indicates investor indecision and impending volatility.

The indecision is likely being caused by clashing fundamentals. Supporting the market is increasing compliance with OPEC’s plan to curtail production. Helping to put a cap on the rallies are concerns over increasing U.S. production.

Despite yesterday’s nearly 2.0% decline, crude oil prices have remained inside a $5 per barrel trading range since the beginning of the year. Crude oil is trading at $53.54 up 1.15% while Brent Crude Oil is trading at $56.31 up 1.30%.

All Eyes on Yellen

While Donald Trump is jumping from a meeting to a meeting, today and tomorrow, the focus will be transferred to Janet Yellen’s testimony. The unanswered question of the next rate hike timing could be solved with Yellen’s indications. Apart from that, many FOMC members will testify today and can shed light about the end of cheap money period.

There will be disappointment should the FED Chair hold back on giving the markets a view, the markets wanting to know whether next month’s FOMC will be a live meeting. We have heard from FOMC members in recent weeks, FOMC voting member Kaplan supportive of lifting rates sooner rather than later, speaking on Monday, but the direction of the Dollar for the remainder of the day and through the week will be hinged on Yellen’s delivery to Congress.

UK Inflation Rising to Its Highest Level Since June 2014

January’s inflation figures released at the time of the report gives the Carney and team some breathing space, the annual rate of inflation hitting 1.8%, falling short of a forecasted 1.9%, whilst accelerating from December’s 1.6%.

The markets responded in kind to the figures, cable sliding 0.37% to $1.2479 upon release of the data.

Global Stocks are Narrowly Mixed as Markets Await Yellen’s Testimony

European stock markets are narrowly mixed in the wake of a heavy data round and as the global stock market rally runs out of steam. The FTSE 100 managed to come back from early lows and is posting a narrow gain after lower than feared inflation numbers, which put pressure on Sterling. The DAX meanwhile is nearly unchanged after German growth numbers missed expectations and ZEW investor confidence took a hit. Elsewhere in the Eurozone, however, bourses moved slightly higher, as the downward revision to Eurozone growth also took some pressure off the ECB to taper its asset purchase program. The Euro Stoxx 50 is unchanged as MIB and IBEX moved higher and counterbalanced the dip in the DAX. Asian bourses closed in the red as investors hold back ahead of Yellen’s testimony. Nikkei and Topix underperformed as the Yen strengthened.

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