Jerome Powell’s testimony yesterday signalled that a rate cut is likely. Markets raced away to trade at new highs with the S+P500 briefly trading above 3000 and the NASDAQ closing at a new record level. Asian markets have followed suit and traded higher, the Hang Seng currently 268 points higher and the Nikkei225 prouder to the tune of 100 points.
The size of the rate cut may still disappoint and with 25 basis points clearly already written into the market,caution is advised at these levels in the market. Powell will testify again today and any slight nuance, difference or affirmation in his testimony will be seized upon.
Tensions with Iran continue as a British War ship intervenes in the Steait of Hormuz.
The dollar loses ground against both the euro and sterling on the back of rate cut expections with sterling climbing to 1.2529 currently.