020 7898 0500The US has posted several pieces of impressive economic data recently which suggests the economy is in full recovery mode. Yesterday was no different, as the jobless claims came in much better than expected and hit their lowest figure since 1969. Manufacturing PMI was also pretty impressive and rose to 60.8 in February from 59.1 the month before, when 58.7 had been expected. It is the highest reading since May 2004. In addition, personal income came in at 0.4% month-over-month in January, beating market expectations of 0.3%. So, a pretty good day for the US overall.
New Fed Chair Jerome Powell testified to the Senate banking committee and because his testimony was the same as Tuesday’s, there was no movement on the currency markets. However, he then took questions and it seemed as if he was striking a more dovish tone than earlier in the week. This softened the dollar somewhat, especially when he said there were no decisive signs of wage inflation just yet; this has the potential to dampen expectations of significant rate rises in 2018 so it will be interesting to see how the year plays out. It is one thing to have four rate rises, but will they be by 25 basis points, or could they be by more than that?
The only real release of note today from the US is the University of Michigan’s final consumer sentiment which is expected to jump to 99.5 in February from 95.7 the month before.
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