The central focus for today is probably still going to be Fed Chair Yellen testifying to Congress, once again.

Yesterday’s testimony confirmed this year’s other rate hike and quantitative policy tightening process that the market expected, but the discussions about the longer-term neutral rate of Fed funds and caution on the inflation outlook gave investors a reason to be cheerful.

There is, perhaps, some confirmation bias to this.

Fed Chair Yellen’s comments were very measured, but markets wanted to see what they wanted to see these days.

The market reaction was not that excessive, so it seems unlikely that there will any attempt to alter the perception with today’s remarks.

Meanwhile, yesterday, the Bank of Canada has joined the tightening party by rising for the first time in seven years its key benchmark interest rate to 0.75 percent from 0.5 percent.

The necessity of abnormally low rates in a normal economic climate is really becoming harder by the day to justify. Even an accommodation addict like the ECB President Draghi is struggling.

The Fed’s Beige Book of economic anecdotal evidence reported limited inflation pressures now, but some potential for the future. The report reads: “In general, growth in input costs was restrained. Some contacts reported ability to pass along commodity input increases as they occurred. According to the Atlanta Fed’s Business Inflation Expectations survey, year-over-year unit costs were up 1.9 percent in June …  expect unit costs to rise 2.0 percent over the next twelve months.”

About the labor market and wage growth we read: “Labor markets tightened further for both low- and high-skilled positions, particularly in the construction and IT sectors …  Wages continued to grow at a modest to moderate pace in most Districts, and many firms attributed these wage gains to tighter labor market conditions. Wage pressures generally trended with employment conditions, and rising wage pressures were noted among both low- and high-skilled positions.”

This acknowledges the obvious point that average hourly earnings are not the same thing as wage growth. In fact, it is perfectly possible for average earnings to go down while everyone earns more money. 

The U.S. consumer was also reported to be spending money, although not it seems on sport utility vehicles.

Meanwhile, China joined the very long list of countries reporting better export growth with strength in their numbers today. Chinese exports rose by 11.3 percent year-on-year (y/y) in June whilst imports expanded 17.2 percent, which resulted in a $42.77 billion trade surplus that was also up from May's $40.8 billion.

Exports to the U.S. increased 19.7 percent on the year to $37.85 billion, which is the highest growth rate since February 2015. The trade surplus with the U.S. came in at $25.4 billion, up from $22.0 billion, which was the largest since October 2015.

This is of course a potentially difficult subject because President Trump tends to get excited about such things and the mention on the Trump twitter feed is not generally constructive.

Nevertheless, what the trade data is signaling, and not just from China, is that global demand remains relatively robust.

Better consumer demand in the United States as signaled by the continuous rise in consumer credit.

Also sustained consumption in Europe supports exports from trading nations, and the volume of trade is currently at a record share of real global GDP.

Because it is and will be important for investors in the foreseeable future, today, the UK government will publish the “Great Repeal Bill,” which is in my opinion more a piece of theater rather than of substance, dealing with exit from the European Union (EU).

The expectation is that the bill will be subject to amendments. Those amendments are very unlikely to include any change to the principle of exit from the EU.

The opposition labor party is as committed to leaving, perhaps more committed to leaving than the governing conservative party. Around 85 percent of the votes of the last election were cast for parties that wish to exit the European Union.

It raises an interesting question: will the UK parliament exert sovereignty?

In the nineteenth century parliament determined legislative details quite frequently. Perhaps, power will now move from the executive legislative branch once again.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.