Yellen To Continue With Tapering
Today the markets will be pretty much on hold, waiting for Fed Chair Janet Yellen to testify before the Senate as the U.S. issues data on jobless claims and durable goods orders. Things are still very much expected to remain along the same line as Yellen said this month the economy can weather cuts to the Fed’s bond buying program, adding that only a notable change to the economic outlook would prompt the central bank to slow the pace of tapering. Federal Reserve Bank of Cleveland President said that cuts to stimulus can continue if the economy and employment market keep improving. Federal Reserve Bank of Dallas chief Richard Fisher also said on Wednesday that he expected the Fed to carry on with tapering in its current guise, even if a “significant correction” in the stock market occurred.
There were surprising figures out of the US yesterday as new home starts unexpectedly climbed in January to the highest level in more than five years. This was despite the harsh weather and highlights increasing strength in the industry showing underlying strength in the industry. Sales increased 9.6 percent to a 468,000 annualized pace, exceeding the highest estimate of economists.
Big news out of the UK this morning were the staggering results from The Royal Bank of Scotland which posted its biggest full-year loss since receiving a government bailout in 2008.
The net loss widened to about £9bn in 2013 from 6.1 billion pounds in 2012.
In Europe, rumours remain that the ECB officials are still thinking of cutting the rates at the next meeting.