Out of the U.S
Early in the week, economic data took a back seat, in spite of weak private sector PMI and consumer sentiment figures.
On Wednesday, the FOMC rate statement and press conference was the main event. A more hawkish than anticipated FED Chair, who failed to downplay monthly rate hikes, spooked the markets.
In the 2nd half of the week, economic data impressed, supporting the FED Chair’s view that the U.S economy could withstand a rising interest rate environment.
Initial jobless claims fell from 290k to 260k in the week ending 21st January. GDP numbers, were also upbeat, with the economy expanding by 6.9% in the 4th quarter. In the 3rd quarter, the economy had expanded by 2.3%.
At the end of the week, inflation and personal spending figures were also key after Wednesday’s forward guidance.
In January, the Core PCE Price Index rose by 5.8% year-on-year, which was up from 5.7% in the month prior. Personal spending disappointed, however,…