US Dollar Prints Bull Pennant Ahead Of Powell, US Data

NEXT WEEK’S ECONOMIC CALENDAR WITH HEAVY US FOCUS

Next week brings a number of US drivers to the table, with the expected highlight being the first appearance of note for incoming Fed President, Jerome Powell. On Wednesday, Mr. Powell walks up Capitol Hill to begin his first semiannual monetary policy report to Congress, dubbed ‘Humphrey Hawkins testimony.’ On Wednesday, Mr. Powell speaks with the House Financial Services Committee, and on Thursday he testifies in front of the Senate Banking Committee. Each of these will begin with prepared remarks, after which the floor is opened for questions and these can range from income inequality to Fed policy to global warming.

DAILYFX ECONOMIC CALENDAR: HIGH-IMPACT EVENTS FOR WEEK OF FEBRUARY 26, 2018

In recent years past, this Humphrey Hawkins testimony has had a tendency to be down-played, as the Fed has largely executed their strategies around rate decisions and accompanying press conferences. The notable exception being February of 2016, when Fed Chair Janet Yellen spoke in-front of Congress as global markets were in a state of disarray. On the first day of her testimony, she was directly asked what the Fed might do with negative rates if the sell-offs at the time worsened: Chair Yellen responded that the Fed wasn’t even sure if negative rates were ‘legal’ for the bank. This did little to pacify markets, and the sell-off continued throughout the day. But – on day 2 of that testimony, Chair Yellen gave a far different answer to that very same question, responding that the Fed ‘wasn’t going to take any policy options off of the table.’ This, markets liked, and in short-order, the bullish train in US stocks had picked right back up where it had left off.

Given that this is Mr. Powell’s first public appearance of note since taking the reins of the Fed at the beginning of this month, this speech will likely be watched for clues or hints towards how the Fed might look to implement policy moving-forward.