Market movers today

Another quiet day. US Fed chair nominee Jerome P owell’s confirmation hearing in t he Senate Banking Commit tee begins today. We expect his approval to be plain sailing despite him not being an economist . Powell is expected to cont inue the Fed’s current monetary policy strategy with gradual hikes.

In the US, we have t ier-2 data releases with trade data, house prices and Conference Board consumer confidence indicator due for release.

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In the euro area, we get M3 money supply and lending data today.

In Sweden, we get retail sales in October, which may shed light on how the Swedes have reacted to the recent development in the housing market .

Selected market news

Last night , Jerome Powell’s prepared text for his confirmat ion hearing was published, see Federal Reserve, which support s t he view that Powell is going to stick to the Fed’s current monetary policy strategy with gradual hikes and a cont inuation of Quantitative Tightening. Given that many Republicans want a more rule-based approach to monetary policy, it is interest ing that Powell says that the Fed ‘must retain the flexibility to adjust our policies in response to economic developments’. The nomination of Powell suggests the Trump administration does not want big changes to the current Fed framework. Also noticeable, Powell says that ‘we will continue to consider appropriate ways to ease regulatory burdens while preserving core reform’. Besides his own remarks, the most interest ing thing about the hearing is the Q&A session and his answers if there are any important quest ions.

Yesterday, the flattening of the US yield curve cont inued, with little news on the data front, amid new home sales surging in the US to the highest level in 10 years. Overnight New York Federal Reserve President William Dudley said in a speech that the US economy is running close to full employment and growth is expanding at an above trend pace.

Today, Bank of Japan (BoJ) Governor Haruhiko Karudo said that a ‘reversal rate’, i.e. the level where interest rate cuts by the central bank could hurt the economy, helps BoJ to understand the appropriate shape of the yield curve. That said, Kuroda added that he did not see any signs that t he BoJ’s ultra-loose policy was causing serious damage to Japan’s banking system.

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