Investors await Powell’s speech, US GDP

Volatility has been lower so far on Thursday, and indices were marginally lower, correcting some of yesterday’s huge gains as two major macro events are on the agenda today.

Federal Reserve Chair Jerome Powell is expected to outline a more flexible approach to policy on Thursday, including shifting to targeting an average inflation rate around 2% that will allow rates to stay super-low for longer.

Moreover, investors will focus on the second quarter’s US GDP, with the preliminary number expected to come at -32.5% annualized, slightly better than -32.9% in the first quarter. That is a shocking number as two quarters in a row with economic activity at -30% is a brutal depression, yet stock markets are roaring higher each day.  

Metals surged yesterday along with stocks, but are correcting sharply lower today, with gold and silver down +- 1% during the Frankfurt session. 

The FX market was boring and unchanged, as most of the time, with the EURUSD pair hovering slightly above the 1.18 level and the USDJPY pair was spotted near 106.