Markets were right to have a watching brief on Mr. Powell’s Congressional testimony. In the event, his comments were sufficiently hawkish to drive a tick up in bond yields and a down draft in equities. This will drive a lower open for the ASX 200 index and other Asian markets this morning.

Markets took note of Mr. Powell’s personal view that the outlook of the US economy had improved since December and that tax cuts, combined with increases in government spending caps would see a meaningful increase in demand growth for the next couple of years.

Last night’s US data releases generally supported Mr. Powell’s views. House price increase continue to run well ahead of both inflation and wage growth. US consumer confidence is at stellar levels, supported by an improving labour market; tax cuts; low interest rates and rising asset values.

Despite the more hawkish flavour of last night’s market action, US bond yields remain below last week’s highs. Mr. Powell’s comments have not yet been enough to move bonds out of their recent range trading. It remains to be seen whether markets will require more evidence on inflation to push yields meaningfully higher.

Mr. Powell’s comments also led to further strength in the US Dollar. This led to commodity prices being sold and will be a negative for mining and energy stocks this morning.

Ramsay Health Care has confirmed guidance for 8-10% growth in core earnings per share this financial year. This comes despite challenging conditions in Europe and this morning’s announcement that Ramsay will take a charge for restructuring of its French operation. Confirmed guidance will not be enough to avoid market disappointment, given valuations of around 23 times forward earnings leading into this result.