Powell says ‘no decision’ but data tells another story! | MarketTalk: What’s up today? | Swissquote

Show notes

Bulls in European equities didn’t’ really get washed out by the Federal Reserve (Fed) hawks; the DAX index closed higher at the wake of Powell’s first day of testimony before the Senate – which went badly hawkish on the other side of the Atlantic.
Yet, the selloff slowed yesterday as Powell said that the data will determine whether the Fed would increase the pace of the interest rate hikes, BUT that ‘no decision has been made on this’ yet.
The US 2-year yield extended its advance above the 5% mark, the 10-year yield hovered around the 4% level. But, the S&P500 swung between small gains and small losses yesterday. The strong jobs data didn’t let much space for funded gains, but Powell’s ‘indecision’ about the next rate hike helped the S&P500 eke out a small gain to the end of the session.
Today, investors will mostly spend the session digesting Powell’s hawkish testimony, the major shift in US rate expectations, and the strong jobs data. They will also watch the US weekly jobless claims and pray that the February NFP print doesn’t surprise to the upside as did the ADP report.
As such, we could see some relief, and correction after two difficult days for risk assets, but investors will likely refrain from opening fresh positions before Friday’s US jobs data, because only God knows what could happen when the data falls in. Risks are two-sided, as soft data could easily spur a risk rally.
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