Yesterday saw a quiet start to the week, with no high tier economic data on the economic docket. European Central Bank President, Mario Draghi will be testifying on the monetary policy and inflation outlook before the European Parliament Economic and Monetary Affairs Committee. Across the pond, FOMC member, Randal Quarles will be delivering a speech at the National Association of Business Economics Policy Conference titled ‘An Assessment of the US Economy.’
The European Union are scheduled to release a draft Brexit withdrawal Treaty. The 100-page document will outline the legal details of how the EU expect the UK to withdraw from the block next March. It is expected that this document will ignore UK Prime Minister, Theresa May’s latest requests on flexibility over the end date of the transition period and the Northern Ireland border issue. However, the document is expected to detail the last resort option for Northern Ireland, which will see it staying part of the EU’s regulatory regime, in order to avoid a hard border with the Republic of Ireland. UK government officials have warned this document is unlikely to be balanced and reflective of both sides, but an attempt to push the EU’s own agenda.
The Eurozone’s Economic Confidence Index, fell for the second consecutive month, after posting 17-year highs back in December. The Index posted 114.1, which was in line with the expected 114.0 reading. The Business Climate Report, posted 1.48, the lowest level since October. Three of the largest economies within the Eurozone showed a decline in their Consumer Sentiment Report; Germany, France and Spain. However, despite the upcoming uncertain Italian election, Italy’s index showed a rise in consumer confidence.
Federal Reserve Chair, Jerome Powell is scheduled to speak before the House Financial Services Committee in Congress this afternoon. This will be his first appearance in Congress since taking over the helm of the Fed from Janet Yellen at the beginning of the month. Although he is expected to mention that the economy is stronger than the Fed were expecting, he is not expected to go into details as to the pace of rate hikes for the year as the FOMC update their economic forecasts in March. However, the markets will be closely watching his responses to the Committees questions for any hawkish hints, especially with four rate hikes on the cards.