Both US government bond yields and the Greenback ascended after relatively hawkish remarks from Fed Chair Powell as he testified to the House Financial Services Committee. In his opening remarks, Powell reiterated the view that further gradual rates increases will be required but also noted that they will have to strike a balance between avoiding an overheated economy and bringing PCE inflation to 2%. He went on to say in the Q&A session that his own outlook for the economy has strengthened since December while recent data has increased his confidence that inflation will rise. Powell’s comments also weighed on US stocks, notably the admission that they do see high asset prices. US bourses closed firmly in negative territory although financials outperformed amid the prospect of higher rates. Elsewhere, oil prices held in the red with US crude futures settling at $63.01 (-$0.90). Meanwhile, gold prices also continued losses, lower by $14.47 at the closing bell. Also of note, No. 2 Republican Cornyn in US Senate says Congress may not have time to address infrastructure this year.
Following the US close, NBC, citing Senior Intel Officials, reported the US is said to have evidence Russia compromised 7 states in 2016 election (Alaska, Arizona, California, Florida, Illinois & Wisconsin)
Looking ahead, we get China’s manufacturing & non-manufacturing PMIs and Japanese industrial production, retail sales, vehicle production, housing starts & construction orders. Down under, we get New Zealand ANZ activity outlook & business confidence and Aussie private sector credit. In work, we get UK GfK consumer confidence, Lloyds business barometer & BRC shop price index.