European bourses opened lower on Wednesday morning as investors awaited a testimony from U.S. Federal Reserve Chairman Jerome Powellhoping for hints on future interest rate cuts from the central bank. Yesterday, Powell kept the markets guessing as he refrained from mentioning monetary policy or economic related matters. Today, Powell will take the stand again, and the market is full of expectations that could go wrong either way. It is clear that stock markets want a dovish glimpse of hope once more, reinforced by yesterday's late rally.
Elsewhere, producer prices out China came in at 0% overnight and continued to cast an ever-darker shadow on the inflation development globally. This might be the buzz word that Powell may have to consider a rate cut, for its effects on the global economy may be even more impactful than on the US economy.
On the Calendar:
A batch of UK data including GDP are due before the afternoon and given the latest economic data out of the UK, chances are they won't be positive and that they will put more pressure on an already capitulating GBP. Later, market participants will focus on Powell’s much-awaited speech and the latest Interest Rate Decision by the Bank of Canada at 14:00 GMT. The BoC is seen holding rates steady at 1.75%, but any dovish statements by the BoC governor could send the CAD tumbling. Oil prices will also be affected by the release of the latest Crude Oil Inventories data at 14:30 GMT this afternoon.
Forex Preview: USD Climbs Higher
The dollar climbed higher this morning on expectations of a less dovish U.S. Federal Reserve today but has not broken significant levels yet. The greenback was also boosted after news that U.S. and Chinese trade officials held a “constructive” phone conversation on Tuesday. We would expect to see a USD breakout in either direction, it all depends on the Fed chair's testimony. Elsewhere, the EUR remained under pressure with expectations of an even more dovish head of the central bank than Draghi had been.
Gold Remains Subdued, BTC Higher
XAU/USD remained supported by market uncertainty but edged slightly lower on a stronger greenback this morning. Spot gold did not break the $1,380 yesterday but the noble metal still shows signs of looking toppish and possibly correcting downwards. Again, Powell's statement will be key for further movement. Elsewhere, BTC pushed further up beyond the $12.8k and is testing that area now from the upside. If the level is confirmed as a support, the 13k round figure may be conquered next.
Oil Prices Rise
Oil prices rose this morning after an industry group reported that U.S. stockpiles fell for a fourth week in a row. West Texas Intermediate (WTI) crude had climbed $1.05 cents, or 1.8% by 8:45 GMT. Brent was up 82 cents, or 1.3%, at $64.98. Watch for the crude oil stocks this afternoon in the midst of Fed news and a BoC central bank meeting.
Watch the video here:
Elsewhere, producer prices out China came in at 0% overnight and continued to cast an ever-darker shadow on the inflation development globally. This might be the buzz word that Powell may have to consider a rate cut, for its effects on the global economy may be even more impactful than on the US economy.
On the Calendar:
A batch of UK data including GDP are due before the afternoon and given the latest economic data out of the UK, chances are they won't be positive and that they will put more pressure on an already capitulating GBP. Later, market participants will focus on Powell’s much-awaited speech and the latest Interest Rate Decision by the Bank of Canada at 14:00 GMT. The BoC is seen holding rates steady at 1.75%, but any dovish statements by the BoC governor could send the CAD tumbling. Oil prices will also be affected by the release of the latest Crude Oil Inventories data at 14:30 GMT this afternoon.
Forex Preview: USD Climbs Higher
The dollar climbed higher this morning on expectations of a less dovish U.S. Federal Reserve today but has not broken significant levels yet. The greenback was also boosted after news that U.S. and Chinese trade officials held a “constructive” phone conversation on Tuesday. We would expect to see a USD breakout in either direction, it all depends on the Fed chair's testimony. Elsewhere, the EUR remained under pressure with expectations of an even more dovish head of the central bank than Draghi had been.
Gold Remains Subdued, BTC Higher
XAU/USD remained supported by market uncertainty but edged slightly lower on a stronger greenback this morning. Spot gold did not break the $1,380 yesterday but the noble metal still shows signs of looking toppish and possibly correcting downwards. Again, Powell's statement will be key for further movement. Elsewhere, BTC pushed further up beyond the $12.8k and is testing that area now from the upside. If the level is confirmed as a support, the 13k round figure may be conquered next.
Oil Prices Rise
Oil prices rose this morning after an industry group reported that U.S. stockpiles fell for a fourth week in a row. West Texas Intermediate (WTI) crude had climbed $1.05 cents, or 1.8% by 8:45 GMT. Brent was up 82 cents, or 1.3%, at $64.98. Watch for the crude oil stocks this afternoon in the midst of Fed news and a BoC central bank meeting.
Watch the video here: