Powell Text Usually Brings Limited Mkt Reaction (3/3)

The last four releases of Powell's 1st day of Congressional semi-annual testimony saw fairly muted reaction, with limited market movements within an hour of the release. Indeed the testimonies have often been overshadowed by other data on the day (eg CPI, ISM) or a recent FOMC meeting leaving little "news" to be revealed by Powell.

• There's scope for this edition to be a little more impactful than most, with Powell's commentary leaning more toward the "fresh" than the "stale" side, a big shift in rate hike expectations since the last meeting, and a limited data slate today.

Reactions to the last four Powell semi-annual testimony text releases:

• Jun 22 2022: DXY was 0.1% lower one hour after testimony text release; 0.1% lower 24 hours after testimony text release. Bonds a little stronger. (Context: this was one week after the FOMC meeting, and the testimony basically repeated what Powell said at the press conference.)
• Mar 2 2022: DXY was flat one hour after testimony text release; 0.1% lower 24 hours after testimony text release. Bonds weaker over both periods.
• Jul 14 2021: DXY was 0.1% lower one hour after testimony text release; flat lower 24 hours after testimony text release. Bonds a little stronger over both periods.
• Feb 23 2021: DXY was 0.3% lower one hour after testimony text release; 0.1% lower 24 hours after testimony text release. Bonds initially flat; a little weaker 24 hours later.