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World Week Ahead: Fed minutes, Trump rally

Federal Reserve chairwoman Janet Yellen has put March on the table whereas markets previously were pricing in June as the most likely month for the next rate hike.

Margreet Dietz
Mon, 20 Feb 2017

As Wall Street continues to scale fresh record highs, investors will eye minutes of the latest Federal Open Market Committee meeting for more insight on the probability of an interest rate increase at the March meeting.

Minutes of the latest policy-maker gathering are scheduled to be released on Wednesday. Federal Reserve chairwoman Janet Yellen, in her semi-annual testimony to Congress last week, warned the central bank shouldn't wait too long before raising rates.

Mrs Yellen specifically put March on the table whereas markets previously were pricing in June as the most likely month for the next hike.

Fed officials scheduled to speak in the coming days include Neel Kashkari, Patrick Harker and John Williams on Tuesday, Jerome Powell on Wednesday, as well as Dennis Lockhart on Thursday.

US markets are closed today for the Presidents Day holiday.

Investors will also scrutinise the latest corporate earnings, with a slew of US retailers including Home Depot, Macy's, Nordstrom, Wal-Mart, Target and Best Buy set to report this week.

The latest US economic data will arrive in the form of reports on the PMI manufacturing index, due Tuesday; existing home sales, due Wednesday; weekly jobless claims, Chicago Fed national activity index, FHFA house price index, and PMI services, due Thursday; new home sales, and consumer sentiment, due Friday.

President Donald Trump's promises on taxes, of which details are yet to be unveiled, helped sustain Wall Street's inching higher to record highs last week. On Friday the Dow Jones Industrial Average, the Standard & Poor's 500 Index and the Nasdaq Composite Index touched record highs once again.

US treasuries also rose on Friday. The yield on the 10-year note yield fell four basis points to 2.42%.

For the week the Dow added 1.8%, while the S&P 500 increased 1.5% and the Nasdaq gained 1.8%.

"Corporate earnings are fine, the economy's fine, the Fed's going to raise rates, and that's great for financials," John Canally, chief economic strategist for LPL Financial, told Reuters.

On Friday Europe's Stoxx 600 Index inched higher to brings its gains for the week to 0.8%.


Margreet Dietz
Mon, 20 Feb 2017
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World Week Ahead: Fed minutes, Trump rally