Financial market research and analysis

Whilst Asian markets inched higher overnight back towards 5 month highs, European bourses are set for a slow start after Wall Street’s close lower. The 3 major US indices all closed in the red after a choppy session on Tuesday, as investors digested Jerome Powell’s update.

The dollar hovered near three-week lows and traders remained un-enthused by Federal Reserve Chair Jerome Powell reaffirming a patient approach to rate hikes to the US Senate Banking Committee. Jay Powell delved into the conflicting signals from the economy that the Fed has been trying to decipher across recent months. As if on cue, disappointing US housing data and stronger than forecast consumer confidence figures provided further evidence of these mixed signals. With Jerome Powell stuck in neural and data very much mixed, there are no strong cues for dollar bulls to take back control. The dollar is inching slowly higher ahead of the second day of testimony by Powell.

2nd US / North Korean Summit

Whilst investors are grappling with a host of uncertainties, such as where next for the US – China trade tensions, what next in Brexit, where is global growth heading? President Trump is in Hanoi for a second summit with North Korean leader Kim Jong Un. Traders will keep an eye on developments, but the intensity of the focus will be nothing like the first meeting which came following months of hot-headed comments from both sides.

Pound Comfortably above $1.32

The pound has kept hold of most of its gains from the previous session. Brexit will remain very much in focus for pound traders across the next two weeks as it moves to crunch point. After Theresa May promised ministers two further votes in addition to the meaningful vote, the edge has been taken off today’s voting in Parliament. The pound is reflecting this with a steady performance heading towards the European open. With Brexit coming to a head in the week commencing March 11th, with the meaningful vote, and a vote on a no deal Brexit and delaying Brexit, volatility in the pound is expected to remain elevated in the coming weeks. Developments so far suggest that we now have an increasingly solid floor at $1.30.

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