The US dollar is still trading near two-month lows after some members of the Federal Reserve expressed concern through FOMC meeting minutes over continued tightening of monetary policy in light of weak inflation and straying away from targets.
Today, markets are waiting to hear Jeremy Powell's testimony before the Senate for the first time after his appointment as a president of the Federal Reserve to succeed Janet Yellen. Powell will receive questions from the audience during the hearing, and in his pre-session speech he stressed the serious desire to get rid of deflation and insisted on flexibility and the independence of monetary policy from political influence. Powell is expected to stick to the current US federal tone.
In the UK, the stress test results for the first time since 2014 show that British banks do not need to raise their capital, they are able to deal with Britain's departure from the EU and the banking system in Britain is resilient. Mark Carney, governor of the Bank of England, announced that Brexit would lead to a slowdown in the economy and rising in unemployment rate.
Barclays and RBS emerged as the weakest lenders during the stress test but did not need to raise their capital. The Bank of England said that the banking system could absorb 50 billion pounds of losses over the next few years and continue lending to support the economy.
For the second day in a row, crude oil prices are falling as markets are waiting for OPEC and its partners’ meeting tomorrow to know about the production cut-off agreement which ends next March. The uncertainty remains about the possibility of extending the agreement until the end of 2018. US crude is currently trading at $57.50. The level is a support and as long prices stabilized over it, it is expected to continue its strong rise targeting the levels of $60 a barrel.
