Friday preview: Yellen may refrain from policy remarks

26th May 2016 15:19

(ShareCast News) - On an otherwise quiet Friday for UK stocks and data, traders eyes should swivel firmly across the Atlantic as Federal Reserve chair Janet Yellen speaks amid newly heightened anticipation of a US interest rate hike.Minutes after the University of Michigan releases its latest reading on US consumer sentiment, Yellen is due to deliver a speech about the economy during a visit to Harvard at 1530 BST on Friday.However, some market commentary predicted Yellen would refrain from making a major pronouncement on interest rates to avoid overshadowing celebration of the university's Radcliffe Day."We don't think it's the right venue," said Michael Gapen, chief US economist at Barclays Investment Bank. "I would be surprised if she made comments."Any comments would come after a hawkish set of FOMC minutes last week and several Fed governors adding since then that two to three rate hikes were on the table in 2016, possibly including at the next meeting, on 14-15 June.Overnight, president of the Dallas Fed, Robert Kaplan, argued in favour of a rate hike "in the near future" but not necessarily at its mid-June meeting, so long as the economy evolved as expected.He also said the risk of Brexit would be "a factor" at the Fed's 15 June policy meeting and noted the risk of a 'sell-off' in the pound should the UK opt to leave the European Union.Speaking in Singapore, St Louis Fed president James Bullard, a voting member, said he was "keeping an open mind" on whether the Committee should raise interest rates at the June meeting, adding that he wanted to "look at the data as it's available at the meeting".US economic data on Thursday might have pleased Yellen, as durable goods orders jumped by 3.4% month-on-month in April; however they were boosted by a surge in the notoriously-volatile civilian aircraft orders that distorted the headline figure.Indeed, a so-called core capital goods orders in fact fell 0.8% in comparison to March, with the consensus estimate 0.3%."A strong dollar and limited overseas opportunities had many observers expecting a rough ride for April's data, so today's numbers represent a corner turned for the world's largest economy," said Dennis de Jong, managing director of broker UFX. "With both the European and Chinese economies still volatile, it's likely that Yellen will continue to hold off hiking interest rates, but if stability returns then all eyes will look to her trigger finger once again."Looking ahead to next week´s key monthly non-farm payrolls figures, Capital Economics said striking Verizon workers and the effects of a Japanese earthquake could make figures more muted."Given the easing in financial conditions and the apparent pick-up in second-quarter GDP growth, the Fed might still want to push ahead with a June rate hike, but that moderation in monthly employment gains could also prompt a delay until July or September."Friday 27 MayINTERNATIONAL ECONOMIC ANNOUNCEMENTSGDP (Preliminary) (US) (13:30)U. of Michigan Confidence (Final) (US) (15:00)Japan CPI (00:30)FINALSNature GroupINTERIM DIVIDEND PAYMENT DATEBlackRock Greater Europe Inv Trust, Mcbride, SCS Group , SwallowfieldQUARTERLY PAYMENT DATEGLI Alternative Finance , Primary Health PropertiesQUARTERLY EX-DIVIDEND DATECanadian General Investments Ltd.SPECIAL DIVIDEND PAYMENT DATEElementis, ITVAGMSAcencia Debt Strategies Ltd., Diamond Bank GDR (Reg S), Escher Group Holdings, Flying Brands Ltd Units, Mincon Group , OJSC Magnitogorsk Iron & Steel Works GDR (Reg S), Pires Investments, TekcapitalFINAL DIVIDEND PAYMENT DATEAcacia Mining, Cello Group, Cenkos Securities, Centamin (DI), Centaur Media, Cobham, Dunedin Income Growth Inv Trust, Elementis, Henderson Group, Highland Gold Mining Ltd., Inmarsat, ITV, Marshall Motor Holdings, Morgan Advanced Materials , Petrofac Ltd., Polymetal International, Randgold Resources Ltd., Regus, SafeCharge International Group Limited (DI), Servelec Group , SIG, SimiGon Ltd. (DI), Spirax-Sarco Engineering, SQS Software Quality Systems AG, Stock Spirits Group , Telit Communications, Travis Perkins, UBM