Fed Chair Jerome Powell's remarks to lawmakers will be closely followed for an idea about its monetary policy plans
Fed Chair Jerome Powell's remarks to lawmakers will be closely followed for an idea about its monetary policy plans AFP News

Stock markets mostly rose and the dollar firmed Tuesday as traders awaited more clues on the outlook for US interest rate hikes from the head of the Federal Reserve.

Fed Chair Jerome Powell on Tuesday begins two days of testimony before the US Congress, where he will be pressed about the central bank's efforts to cool high inflation.

Investors are looking for a clearer idea on when the Fed may pause its rate-tightening cycle that has aimed to cut soaring prices. It raised rates by 25 basis point last month after a half-point increase in December that followed a series of three-quarter hikes.

"At present, the market is pricing in three more rate rises this year, including a 0.25-percent hike later this month, but any increase in hawkish rhetoric would likely spell danger for equity markets," said Richard Hunter, head of markets at Interactive Investor.

While analysts are betting on the United States and other major economies possibly avoiding recession despite inflation remaining elevated, there are concerns over China after the world's second-biggest economy set a lower-than-expected target for its growth this year.

Following Powell's testimony, attention will switch to US jobs data for February that is due Friday.

That comes after January's reading showed more than half a million new jobs were created, far more than expected.

"The key focus will be on how Powell sees the US labour market, and whether the... (policy board) think that economic conditions have improved or deteriorated since the last Fed meeting," said Michael Hewson at CMC Markets.

"If he acknowledges that inflation could be much stickier than the Fed thought over a month ago, that could prompt a pullback in US equity markets."

Europe's main stock markets won a lift from official data showing industrial orders in the continent's biggest economy Germany climbed for a second straight month in January.

In Asia, Hong Kong and Shanghai ended down as data showed Chinese imports and exports fell in January and February.

The gains came after a tepid lead from Wall Street on Monday.

London - FTSE 100: UP 0.3 percent at 7,950.11 points

Frankfurt - DAX: UP 0.2 percent at 15,684.36

Paris - CAC 40: UP 0.2 percent at 7,387.53

EURO STOXX 50: FLAT at 4,313.79

Tokyo - Nikkei 225: UP 0.3 percent at 28,309.16 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 20,534.48 (close)

Shanghai - Composite: DOWN 1.1 percent at 3,285.10 (close)

New York - Dow: UP 0.1 percent at 33,431.44 (close)

Euro/dollar: DOWN at $1.0668 from $1.0684 on Monday

Pound/dollar: DOWN at $1.2014 from $1.2023

Euro/pound: DOWN at 88.80 pence from 88.84 pence

West Texas Intermediate: DOWN 0.2 percent at $80.30 per barrel

Brent North Sea crude: DOWN 0.4 percent at $85.80 per barrel