Talking Points:

– This week saw a key break of a pivotal resistance level on the U.S. Dollar, as price action in the Greenback signaled the possibility of more gains ahead.

– A chorus of hawkish Fed speakers appears to be the source of the Dollar’s strength; and this afternoon we hear from Fed Chair Janet Yellen and Vice Chair, Stanley Fischer ahead of the bank’s ‘blackout period’ ahead of their next rate decision in a week-and-a-half.

Next week brings a series of important events to markets, with the both Australian and European Central Banks hosting rate decisions; and on Friday of next week – we get what’s looking to be a pivotal Non-Farm Payrolls report as this will be the final major data point to consider before going into their two-day meeting and rate decision in the week after.

This has already been a rather brisk week for markets, and we’re not yet done. Later this afternoon, both Fed Chair Janet Yellen and Vice Chair Stanley Fischer are offering commentary to markets; and this will be the last set of public speeches by Fed officials before the bank moves into its ‘blackout period’ before the next rate hike. So this will be the last opportunity for Fed-speak to evoke volatility across markets before that next rate decision in a week-and-a-half (March 14-15). Expectations for a hike in March have shot-higher this week, and as we looked at yesterday, a large part of this drive has been Fed commentary. This week alone, we have heard from William Dudley, Patrick Harker, John Williams, Lael Brainard, Jerome Powell and Robert Kaplan – and all have seemingly suggested that a rate hike is ‘near’.

The U.S. Dollar put in aggressively bullish price action on Tuesday to finally pose a sustained break above a key level of resistance at 101.53.

Chart prepared by James Stanley

RBA – Tuesday Morning

The Reserve Bank of Australia hosts a rate decision on Tuesday morning (Monday evening in the States), and the expectation is for no move. The RBA finds itself in an unenviable position here. Concerns are very real around the continued and rampant run in real estate prices; and earlier this week, credit rating agency Standard and Poors warned that a downgrade may be in order for most of the country’s banks as economic risks continue to rise.