Market Snapshot – Yellen To Testify on Capitol Hill, US Inflation Rises

US Inflation Rises to Highest Since February 2013

The US inflation figures came out higher than expected, adding more pressure on Yellen and FOMC members to increase interest rate in their next meeting g on March.

YoY Inflation Rate climbed by 2.5% compare to previous 2.1% and above analyst expectation of 2.4%. YoY Core Inflation rose by 2.3% compare to 2.2% in the previous month and higher than forecast of 2.1%.

Retail Sales also beat expectations as MoM data came out at 0.4% above analysts forecast of 0.1%.

Pound Falls after Employment Data

The British Pound fell against major currencies today after employment data revealed that UK companies are not raising pay rates to the extent economists were expecting.

The data how shows that the Average Earnings Index including bonuses rose at 2.6% in December compare to analysts expectations of 2.8%.

Employment rate remained unchanged at 4.8% and claimant Count Change came out positive with 42.4K people seeking benefits compare to 20K a month earlier.

The Pound is trading lower vs US Dollar at 1.2389 down 0.62%.

Yellen to Testify on Capitol Hill, Dollar Rises after Yesterday’s Hike Comments

the FED Chair’s testimony was less ambiguous than normal on Tuesday and certainly brings into play today’s U.S stats, which include January retail sales and inflation figures.

Yellen was clear that the March FOMC is a live meeting and that the FED will need to move sooner rather than later on rates, should economic indicators continue to support the FED’s outlook on the labour market, inflation and growth.

Janet Yellen will testify in front of congress today at 15:00 GMT. yellen will have a tougher crowd today as the recent clash between Federal Reserve and the administration reached a boiling point.

The US Dollar is still stable against all major currencies. Dollar index is trading at 101.66, +0.44%.

Oil Edges Lower as Traders Await EIA Numbers

Crude oil prices are under pressure shortly before the regular session opening and the release of weekly inventory data from U.S. Energy Information Administration. The market is under pressure because of Tuesday’s bearish American Petroleum Institute’s weekly inventory report. It showed a large rise in U.S. crude inventories.

According to the API, U.S. inventories rose by a larger-than-expected 9.9 million barrels the week-ended February 10. This was more than traders had estimated.

The size of U.S. inventory and the current uptrend in U.S. production raises doubts about whether the OPEC production cuts will have any impact over the short-term.

Later today at 1530 GMT, the U.S. Energy Information Administration will release its inventory data. It is expected to show that U.S. inventories rose 3.5 million barrels during the week-ending February 10. Traders should also keep an eye on the gasoline numbers. They helped trigger a rally last week when they showed an unexpected drawdown.