Global stocks advance ahead of FED Chairman Jerome Powell’s awaited first congressional testimony later in the day

European bourses are higher, tracking an improving mood on Wall Street overnight ahead of the inaugural testimony by Federal Reserve chair Jay Powell to Congress.

The event is likely to help define sentiment, playing into investors’ expectations for the pace of rate tightening in the US, where the return of inflation looks to give the central bank more room to act. It has provided one of the main market themes of 2018, as investors calibrate the potential consequences and the relative outlook for speed of monetary policy tightening around the world.

Every Fed chair goes before Congress twice a year to report on the state of the economy. Investors will be paying even closer attention this time for clues on how quickly the Fed might raise interest rates if inflation picks up.

Investors say that expectations that Powell will be sensitive to financial markets appear to be running high. But he hasn’t said he will sacrifice policy normalization for the sake of financial markets. Certainly it seems that there is room for disappointment in markets. In the meantime, the dollar is slipping back from the highs for the month it touched three sessions ago. It is down 0.1 per cent on the session at 89.735.

Positive sentiment has spread from Wall Street, via much of Asia to Europe, although Chinese stocks ended a winning streak of about six sessions.

European shares are expected to gain, with spread-betters looking to a higher opening of about 0.4 to 0.5% in Britain’s FTSE, France’s Cac and Germany’s Dax.

Japan’s Nikkei rose 1.1% to three-week highs while MSCI’s broadest index of Asia-Pacific shares outside Japan also hit a three-week high before giving up gains on profit-taking in Chinese shares.

Mainland China’s CSI 300 fell 1.5% and Hong Kong’s Hang Seng fell 0.9%

On Wall Street, the S&P 500 advanced 1.18 percent on Monday helped by a fall in U.S. bond yields.

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Sources: 

https://www.investing.com/news/stock-market-news/asian-shares-near-threeweek-high-ahead-of-powells-testimony-1313088

https://www.ft.com/markets

https://www.ft.com/content/8522e452-1b5d-11e8-aaca-4574d7dabfb6

http://money.cnn.com/2018/02/27/news/economy/federal-reserve-congress-powell/index.html

https://www.thestreet.com/video/14500365/5-things-to-know-about-federal-reserve-chairman-jerome-powell.html

http://www.abc.net.au/news/2018-02-27/wall-street-surges-ahead-jerome-powell-fed-testimony-asx/9487702