Global equity indices are lower across the board due to a number of factors after the S&P 500 posted its 19th record high of the year, matching the same number of highs in 2018.
The Dow 30 remarkably matched (but did not break above) its high from earlier this week. Trump's speech not only stayed far away from confirming reports of removing US tariffs on China, but it also renewed threats towards Beijing.
The RBNZ's surprise decision not to cut rates is also contributing to the risk-off climate, especially as Fed Chair Powell will be expected to deliver the same message that there is no need for further rate cuts Congress. A new trade was issued yesterday, backed by 5 charts.
Powell's testimony to lawmakers at 10 Eastern text of speech may be released as early as 8:30 Eastern or 13:130 London) is expected to maintain the same neutral tone he held at last month's post-FOMC press conference, but the extended Q&A period will shed light on the extent to which he is deviating away from a December rate cut. So far, the market sees no chance of a rate cut until Spring.
Trump and the markets will be busy watching the first day of the hearings on his impeachment, but no urgency is expected to weigh on markets unless there is a sign that Republicans are clearly starting to turn on the president.
Remarks from US officials denouncing the violence in Hong Kong and backing their support for protesters may lead to pushback from Beijing in the form of bellicose statements relating to the trade talks, especially after Trump's renewed threat that tariffs will “raised very substantially” if no truce was reached.