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24 Feb 2015
Fed chair Yellen's testimony key event on Tuesday - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, breaks down the main events for Tuesday, emphasizing Fed chair Yellen's emi-annual congressional testimony to the Senate banking committee from 10am NY.
Key Focus
"In New Zealand, we have Q1 RBNZ 2yr inflation expectations (1pm Syd/10am Sing/HK). Actual inflation surprised to the downside in Q4 and the RBNZ indicated in their last statement that inflation is expected to be below the target band through 2015. The calendar in Asia is quiet. Markets in China are closed for the last day of the lunar new year holiday."
"In Europe, Jan final CPI is forecast to remain at -0.6%. While falling petrol prices weigh, wider deflation concerns led the ECB to announce last month an expansion of their asset purchase program. Greece’s list of reforms should be submitted no later than the European morning, with reports of a conference call between EZ finance ministers in the evening."
"Fed chair Yellen delivers the first leg of her semi-annual congressional testimony (previously known as Humphrey-Hawkins) to the Senate banking committee from 10am NY time. Markets will look both to the prepared text and the lengthy Q&A session for hints on how firmly Yellen is leaning towards a (northern) summer tightening, probably June. She will be cautious with her language but probably fairly upbeat overall. We see this playing broadly USD-positive yet are wary of existing market positioning in this direction. Surely the “pain trade” is a dovish message from Yellen."
"On the data front in the US (overshadowed by Yellen) the Dec S&P/Case-Shiller 20 city home price index is expected to continue to fall, showing fading momentum. Feb consumer confidence looks likely to pull back to 99.5 after Jan saw a sharp jump to 102.9, boosted by oil. The Feb Richmond Fed manufacturing index, which has held up better than other surveys of late, will also be released."
Key Focus
"In New Zealand, we have Q1 RBNZ 2yr inflation expectations (1pm Syd/10am Sing/HK). Actual inflation surprised to the downside in Q4 and the RBNZ indicated in their last statement that inflation is expected to be below the target band through 2015. The calendar in Asia is quiet. Markets in China are closed for the last day of the lunar new year holiday."
"In Europe, Jan final CPI is forecast to remain at -0.6%. While falling petrol prices weigh, wider deflation concerns led the ECB to announce last month an expansion of their asset purchase program. Greece’s list of reforms should be submitted no later than the European morning, with reports of a conference call between EZ finance ministers in the evening."
"Fed chair Yellen delivers the first leg of her semi-annual congressional testimony (previously known as Humphrey-Hawkins) to the Senate banking committee from 10am NY time. Markets will look both to the prepared text and the lengthy Q&A session for hints on how firmly Yellen is leaning towards a (northern) summer tightening, probably June. She will be cautious with her language but probably fairly upbeat overall. We see this playing broadly USD-positive yet are wary of existing market positioning in this direction. Surely the “pain trade” is a dovish message from Yellen."
"On the data front in the US (overshadowed by Yellen) the Dec S&P/Case-Shiller 20 city home price index is expected to continue to fall, showing fading momentum. Feb consumer confidence looks likely to pull back to 99.5 after Jan saw a sharp jump to 102.9, boosted by oil. The Feb Richmond Fed manufacturing index, which has held up better than other surveys of late, will also be released."