Global market snapshot: knee-jerk spikes on Powell - ANZ

In a market snap-shot, analysts at ANZ explained that Fed Chair Powell’s upbeat testimony was viewed on the hawkish side compared to the prepared Monetary Policy Report, sparking an equity sell-off and yield spike. 

Key Quotes:

"The USD rallied and commodities fell. A number of US data releases saw minimal market reaction before Powell’s testimony with durable goods orders declining, inventories rising, consumer confidence spiking higher, and the Richmond Fed manufacturing survey up. Powell’s prepared remarks did not elicit a market reaction, but during the testimony he struck an upbeat tone and said asset prices are high. 

US yields rose 4-7bps across the curve (10-year yield 2.92%) on expectations of tighter monetary policy. The S&P 500 index is down 0.4% at the time of writing driven by interest rate-sensitive sectors: real estate and consumer discretionary. 

Earlier, the main European equity indexes were little changed. The USD appreciated against all in the G10. Commodities fell with the stronger USD, with oil down about 1.5% and gold dipping 1.3% to USD1316/oz at the time of writing."