Markets

Dollar finds a friend in Powell as global stocks slip

Dollar finds a friend in Powell as global stocks slip

New Federal Reserve chief Jerome Powell said in prepared remarks to the US Congress that rate hikes should continue despite the added stimulus of tax cuts and government spending. "The markets don't yet know how this new regime will digest this data and the result has been this see-saw in the equity markets". He stated, 'We see idiosyncratic factors behind low inflation and its part of a global phenomenon.

Hawkish comments from Jerome Powell have rekindled interest rate hike fears and as such continues to pressure stock markets.

"Given that the long-run dynamics for the USA economy have not altered - and in some regards deteriorated - we doubt that Fed Chair Powell will want to flip the policy script and prep markets for a more aggressive tightening path just yet", said ING currency strategist Viraj Patel, in London.

For the Dow and S&P500 we've seen the first monthly loss since last March a year ago, breaking a ten month winning streak, while European markets also lost ground with the DAX making its weakest monthly close since August, and the FTSE100 posting its weekly monthly close since April. There is also now a very good chance that we could see as many as four rate increases.

Overall, nominal incomes rose 0.4 percent in January from the prior month, as wages and salaries increased 0.5 percent.

An employee of a bank counts United States dollar notes at a branch in Hanoi, Vietnam May 16, 2016.

The continued suppression of wages has been at the very centre of the profit accumulation process for major USA corporations, and the Fed is particularly sensitive to any signs that a fall in unemployment will lift labour costs.

Dana White teases Brock Lesnar's UFC return
Velasquez napped Lesnar's four-fight win streak and dethroned him from the heavyweight mountain top. TMZ Sports asked Paul Heyman about his client possibly returning back to the octagon.

Mr Powell, who was nominated by Republican President Donald Trump and later confirmed by the Republican-controlled US Senate, said he felt the Fed's current tools for managing interest rates, a steady decline of its balance sheet, and its 2 per cent inflation target were working fine.

The nervousness on the financial markets may have been compounded by news that striking teachers in West Virginia were denouncing a sellout agreement announced Tuesday by teachers' union leaders and planning to defy their call for a return to work on Thursday.

Powell also downplayed a new study arguing that the Fed's bond purchases were less effective than previously thought.

Stocks tumbled on Wall Street while the US dollar fell on Thursday after President Donald Trump said the United States would impose tariffs on steel and aluminum imports, sparking fears of a harmful global trade war. When it comes to inflation, you need to be careful what you wish for. The downward revision to GDP growth matched economist estimates.

During the same testimony, Powell commented on the economy more broadly. He said the aim of the changes was to reduce the burden of regulation "without losing any safety and soundness".

The job market is tight, but Powell isn't anxious that wages are rising too quickly, which can lead to inflation. For that reason, he said, the Fed does not feel it needs to speed up the pace of benchmark policy rate increases. Thursday, however, the Dow was down 96.08 points at 24,933.12.

Former Fed chief Ben Bernanke famously set off a global bond rout - the "taper tantrum" - in 2013 when he indicated the central bank was about to scale down the bond buying program it began to fight the 2007-2009 financial crisis. "That's unknown and the market hates uncertainty", Orlando said.


  • Shot Dead At Central Michigan University

    Shot Dead At Central Michigan University

    Heavily armed officers fanned out throughout the city, and residents and students were asked to stay inside and lock their doors. USA Today reports that police believe the suspect is still on campus. "If you see something suspicious, call 911", it wrote.
    Graham's body begins journey to Charlotte

    Graham's body begins journey to Charlotte

    Graham will lie in honor at the US Capitol rotunda beginning next week, House Speaker Paul Ryan announced in a statement Thursday. But it was unclear if a member of the Royal Family would attend the service in Charlotte, North Carolina, on Friday.
    Dropbox is going public: Here's who's making money

    Dropbox is going public: Here's who's making money

    However, these are significantly improved margins as the company lost nearly $210 million in 2016 and $326 million in 2015. It noted that the actual number of people using its service might be lower because some register more than one account.
  • Apple expected to launch three new iPhones in 2018

    Apple expected to launch three new iPhones in 2018

    It, too, will use OLED technology and could include a resolution of 2688 x 1242 (at least that's what Apple's now testing). Munster predicts a supercycle - which he defines as upgrades by 10 percent or more of Apple's existing iPhone customers.
    Kylie's daughter Stormi makes Snapchat debut

    Kylie's daughter Stormi makes Snapchat debut

    The 20-year-old mogul uploaded a video of herself sweetly holding Stormi's feet and saying, " Mommy's cute little toes". Kylie also showed off the baby on Snapchat yesterday (probably to make up for their plummeting stock).
    Winter Olympics 2018: Canadian athlete arrested, according to report

    Winter Olympics 2018: Canadian athlete arrested, according to report

    They have been banned from leaving South Korea , but the police says that they could be released if they pay a fine. The 35-year-old British Columbia resident also won an X Games silver medal in 2010 and bronze medal in 2012.
  • Haley: We 'Need to Take Action on our Own' on Iran

    Haley: We 'Need to Take Action on our Own' on Iran

    The joint condemnation came a day after Russian Federation vetoed a British-drafted resolution renewing sanctions on Yemen. Security Council to take further action against Iran for breaching the arms embargo.
    Jaguars finalizing 3-year contract extension with Blake Bortles

    Jaguars finalizing 3-year contract extension with Blake Bortles

    Bortles likes to stick his tongue out to taunt opponents as he throws incomplete passes . "That's his only goal". Bortles finished the 2017 season with 3,687 yards, 21 touchdowns and 13 touchdowns.
    PM arrives in Chennai to launch 'Amma scooter scheme'

    PM arrives in Chennai to launch 'Amma scooter scheme'

    Earlier the prime minister was welcomed by Governor Banwarilal Purohit, Palaniswamy and top State officials at Chennai airport. Modi was flown to the Indian Navy's base, INS Adyar, from where he took a minutes-long drive to the venue of the launch.
  • Proteas continue to chip away but Marsh holds firm

    Proteas continue to chip away but Marsh holds firm

    South Africa had burned both reviews early and replays showed that had it been reviewed the decision would have been overturned. An amusing sidenote from the day's play was Australia's unorthodox bid to get the stump microphones turned down.
    Video sheds light on Owen Farrell's role in tunnel fracas

    Video sheds light on Owen Farrell's role in tunnel fracas

    Hughes was left furious, with several players from both sides steaming in - but ref Nigel Owens and his assistants missing it. New footage has emerged of Owen Farrell pushing past Scotland players before melee erupted at Murrayfield.
    Canada 'serial killer' charged with sixth murder

    Canada 'serial killer' charged with sixth murder

    Canadian police charged an alleged serial killer on Friday with another murder , bringing the total to six. Kayhan was reported missing in 2012, Marmudi in 2015, Esen and Kinsman in April and June 2017 respectively.