Institution: Tuesday inflation data folded Gawash testimony, market closely followed direction signals

ON 13 JULY, INVESTORS WILL FOLLOW UP ON THE SEMI-ANNUAL TESTIMONY GIVEN TO CONGRESS ON TUESDAY AND WEDNESDAY BY THE NEW FEDERAL RESERVE CHAIRMAN, KEVIN WALSH, TO OBTAIN HIS LATEST VIEWS ON INFLATION AND INTEREST RATES, AS WELL AS AN UPDATE ON HIS PROGRESS IN REFORMING THE FEDERAL RESERVE. WALSH MAY HAVE BEEN ASKED BY MEMBERS OF CONGRESS ABOUT HIS EXTENSIVE FED REFORM PLAN. THE FED HAD PREVIOUSLY ANNOUNCED THE APPOINTMENT OF FIVE WORKING GROUPS ESTABLISHED BY WALSH TO ASSESS ALL MATTERS, FROM COMMUNICATION TO BALANCE SHEET SIZE. IAN LINGEN, HEAD OF THE US INTEREST RATE STRATEGY IN BMO CAPITAL MARKET, STATED THAT INVESTORS WOULD FOLLOW THE CASE OF WALSH TO OBTAIN FURTHER DETAILS AND GUIDANCE ON HOW THE PRESIDENT STRUCTURED THE OVERALL STATE OF THE US ECONOMY AND THE FED POLICY. MARKETS ARE NOW IN A LOW STATE OF TRADE AND CONFIDENCE. THIS WAS AT LEAST UNTIL TUESDAY'S INFLATION DATA AND WALSH'S TESTIMONY WERE PUBLISHED. KIM XIAN