Stocks mixed before Fed chair Jay Powell testimony

Stocks are a pretty mixed, directionless bag right now as the market awaits Fed chair Jay Powell’s testimony in Washington. Wall Street was split – SPX nudged a touch higher, closing about one-tenth of a percent higher close to 2980 having been around 15 points lower earlier in the session. The Dow meanwhile slipped a touch. 

Asia broadly stronger overnight but Chinese shares down a touch. European shares are mildly lower as Mr Powell is set to go up the hill. Caution will be the order of the day until markets get what they want from the Fed chair – if they do. 


Sterling is still languishing at its lows. Ex the January flash crash we’re down at 2-year lows for the pound, with the threat of a no-deal Brexit looming over sterling. GBPUSD was last at 1.2450, a shade off yesterday’s trough but still looking weak. 

Dollar strength is returning as traders dialled back expectations for a deeper, aggressive round of cuts by the Fed. All eyes on Jay Powell’s testimony later on as well as the minutes from the last Fed meeting. The prospect of the Fed chair nudging market thinking slightly away from cuts should keep traders on their toes. Euro steady at 1.120 – look for a move below 1.1180 to push the cross back to the lows. 


Oil is firming up after yesterday’s surprisingly large drawdown on inventories. API data showed stockpiles fell by 8.1m barrels last week, versus a c3m draw expected. The data could offer renewed support for oil prices. Meanwhile speculative long positions are growing again. Brent was last a shade below $65. Patterns look a bit bearish and flaggy though. Price action for now looks bound between the $62.50-$65.50 levels, the 50% and 38.2% Fib levels of the big rally through 2019. 

Data overnight – China inflation came in as expected at 2.7%, whilst PPI was weaker, coming in flat in June from the month before.