23.02.202110:35 Forex-elemzések és áttekintések: Market attention is on Europe's inflation data and Powell's speech

The world stock markets are still in a consolidation phase despite yesterday's local rebound. The reason lies in the expected positive news from the United States, which will likely boost the demand for shares.

It was mentioned a few times that investors continuously live with expectations of a new positive wave in the US, which will stimulate growth in demand for company shares and can serve as the main driver to continue the consolidation period of stock indices. However, everything on the US indices is unclear. But still, market participants who are focusing on companies' stocks that enjoyed widespread interest during the pandemic to securities that have prospects for growth with its end, led to the recovery of the DOW 30 index. But on the contrary, the other two main indicators S&P 500 and NASDAQ 100 declined, with the high-tech index leading the fall.

The US dollar declined against all major currencies on the currency market, but its ICE index still managed to stay above the key level of 90.00. At the moment, the indicator is at the level of 90.3 points. It is fair to note that the dollar weakened despite the steady growth in Treasury yields. Most likely, this is caused by traders in the currency market who listened to the Fed members again and are anticipating J. Powell's speech in the Congress today.

In general, everything remains unchanged. The dynamics is expected to continue until it becomes clear what will be the real amount of financial aid will actually be adopted by Congress under Biden's previously proposed program in the amount of $ 1.9 trillion, and how much of it will enter the market in the form of liquidity.

Today, the market's attention will be focused on the publication of consumer inflation data in the Eurozone, where sharp growth is expected. In addition, the values of the consumer confidence index from the CB, Redbook's retail sales index, and J. Powell's speech should also be looked forward to.

It is hard to predict what will be the market's reaction to the speech of the Fed Chairman. On the one hand, everyone is prepared that he will repeatedly talk about the prospective easing of monetary policy, but on the other hand, they will look for any reservations indicating that the regulator may change the view of monetary policy, as soon as the economic recovery is strong and will be accompanied by a sharp increase in inflationary pressure.

Forecast of the day:

Gold is trading higher in the wake of the weakening US dollar. If its price breaks the 1816.00 level, further growth can continue towards 1828.00.

The USD/CAD pair remains under pressure amid crude oil's sharp growth and dollar's local weakness. If the price declines below the level of 1.2580, it will most likely further fall to 1.2525.