The Race Is Back On…
After everyone has spoken and the curtain seems to have come down for the interval of the Greek story, we are now back to talking about a rate hike race.
Janet Yellen spoke at Capitol Hill yesterday, this time in front of the House Financial Services Committee. Anyone expecting any new revelations would have been sorely disappointed and somewhat misguided as she delivered pretty much an identical speech to the previous day. Stressing patience and the need for the labour market to continue to improve, the highlights were probably when she said that she doesn’t discuss monetary policy in her meeting with US Treasury Secretary Lew and doesn’t coordinate with The White House.
Sterling is continuing to rise against all at the moment as it is seen to be benefitting from a growing economy and a rate hike is on the agenda. However, the impending General Election in May is causing a delay. Mark Carney has commented on how low inflation is temporary and this would not complicate a rate rise as it has been driven by low oil and food prices. Similarly, the BoE continues to worry about a housing bubble and wants to eventually raise rates for stability reasons.
Important data today includes unemployment data from Germany, GDP from the UK, CPI from Canada and the US and durable goods orders from the US.