Once again, Powell reiterates Fed’s patient position…
During his speech yesterday afternoon, Federal Reserve chairman, Jerome Powell, continued to assure markets that the central bank were now in patient mode. His words could not be mistaken as he continues to push a new message for a new year, ensuring his new route down patient pathway instead of aggressive ally was loud and clear. His exact words “We’re in a place where we can be patient and flexible and wait and see what does evolve, and I think for the meantime we’re waiting and watching.” Regardless of this dovish rhetoric, the greenback did not give much ground up yesterday. It’s trading in resilient fashion despite ongoing political woes in the USA. If the government remains shut across this weekend then it will be the longest in history. We should also begin to see real effects from today onwards as Federal workers miss their usual Friday pay check. Hopefully common sense will prevail.
The final trading day of the week sees a number of important releases. The morning sessions sees a slew of UK numbers: manufacturing production, industrial output, trade balance and the monthly GDP estimate. These data releases take on additional importance as they’re likely to be some of the last reports of the like before we depart from the European Union. The afternoon trading session sees focus shift across the pond. The highlight will be US inflation numbers, a key indicator for the Federal Reserve. The curve ball today would be a much hotter reading, which would once again create more debate over the Fed and interest rate hikes. Have a great weekend.
Written by Viv Savani. 8:38am, January 11th 2019
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