Daily Market Digest: Janet Yellen Testifies, Canada Retail Sales

Federal Reserve Chairwoman, Janet Yellen continues into day two of testifying to the US Senate banking committee. Markets remain nervous ahead of UK’s referendum vote tomorrow. Canada’s retail sales beat estimates.

Today’s Economic events

• Australia MI leading index m/m 0.20% vs. 0.10% previously
• New Zealand Credit card spending y/y 5.90% vs. 9.10% previously
• Switzerland ZEW economic expectations 19.4 vs. 17.5 previously
• Canada core retail sales m/m 0.90% vs. 0.70%; retail sales m/m 1.30% vs. 0.80%

Coming Up

• SNB Quarterly Bulletin
• US HPI m/m
• Eurozone consumer confidence
• Fed Chair Janet Yellen testifies
• US Crude oil inventories

Fed Chair Testifies to US banking committee

Federal Reserve Chairwoman, Janet Yellen appeared before the US Senate banking committee yesterday as part of a two-day event. In her speech to the committee yesterday, Ms. Yellen did not waver from the comments made after the FOMC decision last week. She said that the Federal Reserve would be closely watching the developments surrounding the labor markets which seem to have slowed down in recent times and also keeping an eye on inflation and the global economy.

Ms. Yellen said that the FOMC expects to hike rates at a gradual pace and said that economic activity in the US will expand at a moderate pace and hopes that the labor market indicators will strengthen further. In her speech, Yellen said that the recent slowing in the US labor markets was transitory but stated that the Fed was keeping a close watch. The Fed Chair also briefly touched upon the uncertainty surrounding the UK referendum and said that the Central bank would be closely monitoring the global economy and the financial developments.

Reflecting on the speech, ANZ analysts said, “Fed Chair Yellen’s testimony to the Senate overnight offered few new clues on the path of normalization. But there was a subtle change in tone from being on watch for whether, rather than when, the U.S. economy would show clear signs of improvement. Still, she looks in no hurry to normalize U.S. rates”