Tedious testimony (but it's better than Brexit)

Posted by: Paul Donovan

27 Feb 2019
  • Fed Chair Powell (a lawyer, not an economist) read some prepared remarks before the US Senate yesterday. Whoever prepared the remarks ensured that they were not very interesting to markets. The message of "patience" was stressed, with some rather unremarkable comments on the labor market. Fed Chair Powell will read some prepared remarks before the US House of Representatives today.
  • Tensions between India and Pakistan have escalated in Kashmir. This sort of event can often lead to a short reaction in financial markets, but the consequences are largely confined to the countries concerned and have limited lasting effect.
  • For those who are watching the interminably tedious EU-UK divorce, and who are still awake, the options are now:  government deal; no deal; delay with a no-deal option. Sterling rallied on this news, apparently because foreign exchange traders have nothing better to do on a Tuesday afternoon.
  • Weidmann of the ECB and Bundesbank is speaking, which will give a sense of the strength of the ECB hawkish faction. The US is offering December inventory data. Normally this would be of little or no interest to markets, but retail inventories may give some additional information about the dubious quality of December retail sales data.

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