Powell Speech Preview
What’s in Today’s Report:
- Powell Speech Preview
Futures are modestly higher as markets bounce back from Thursday’s declines ahead of Powell’s speech.
There were no new developments in Afghanistan overnight as evacuations continued. The tragedy temporarily hit stocks but it won’t be an ongoing influence on markets.
Expectations for more stimulus from China rose overnight as chatter regarding a Reserve Ration cut grew louder and this, combined with some pre-Powell positioning, are the main reasons futures are higher.
Today the key event is obviously the Powell speech (10:00 a.m. ET) but as a reminder, he won’t announce anything specific regarding tapering (that will come at the Sept 22nd Fed meeting). Instead, the key will be how much Powell discusses the Delta variant as an economic headwind (the more he mentions it, the more dovish the speech will be taken) and if he reaffirms the Fed is getting close to being able to taper QE (which will mean before year-end).
Outside of Powell, the Core PCE Price Index (E: 0.3% m/m, 3.6% y/y) is the key economic report this morning but as long as it’s much higher than expectations, it won’t move markets.
