The stock market meltdown investors were fearing yesterday ended up not taking place, leaving us even more puzzled regarding the previous day’s sharp pullback. Although all scenarios are on the table, there’s no denying that there is a growing feeling on markets that something is brewing. It remains to be seen what will serve as the catalyst, possibly the outcome of the U.S. Congress vote to reform healthcare. For the moment, nothing appears to indicate that the Republicans have an agreement wrapped up.
Another element that bears watching will be the speech by Federal Reserve Chair Janet Yellen at 8:45 this morning, when she will have the opportunity, if she so chooses, to send a clearer message to Wall Street. However, it’s difficult to imagine what more markets want, given that she has already discussed two additional rate hikes this year and three in 2018 and that the U.S. economy is performing well.
On the currency front, markets are still adrift. Only the pound sterling is standing out, climbing timidly further to the release of stronger than expected Retail Sales in February.
