Powell’s Testimony Takeaways
What’s in Today’s Report:
- Powell’s Testimony Takeaways
- NFIB Small Business Survey Signals Cautious Outlook
Markets are trading with a risk-on tone this morning as U.S. equity futures track global shares higher after Powell’s testimony helped stabilize bond markets yesterday while investors look ahead to today’s CPI report.
Chinese inflation data was cooler than feared o/n with CPI dipping to 1.5% vs. (E) 1.8% and PPI falling to 10.3% vs. (E) 11.3% Y/Y which is helping ease inflation concerns today.
Looking into today’s session, the December CPI report (E: 0.4%, 7.1%) will be the main focus of markets early with the annual figures expected to hit a fresh multi-decade high. But as long as the headline and core figures are not materially “hotter” than feared, this week’s relief rally, led by tech shares, should be able to continue amid further stabilization in bond markets.
Outside of the early inflation data, there is one Fed speaker to watch: Kashkari (1:00 p.m. ET) as well as a 10-Year Treasury Note auction at 1:00 p.m. ET. And as long as Kashkari does not contradict any of Powell’s comments from yesterday regarding the balance sheet runoff coming “later in the year,” and the auction doesn’t spark a new move higher in yields, then risk-on money flows should be able to continue.
