It’s a yes for Dr Yellen
City Index October 9, 2013 2:35 PM
<p>President Obama will announce Dr Janet Yellen as his nominee to succeed Ben Bernanke as Chair of the Board of Governors of the Federal Reserve […]</p>
President Obama will announce Dr Janet Yellen as his nominee to succeed Ben Bernanke as Chair of the Board of Governors of the Federal Reserve System at a press conference at 3pm EST from the White House, where he is likely to be joined by both Yellen and Bernanke. The market reaction saw a knee jerk rally in stocks and a mini sell off in the dollar in the twilight trading zone in Asia as Yellen is a known dove and will ensure the Fed remains on the side of caution with regards to the tapering issue. Unlike other potential candidates Janet Yellen is not a personal friend of the President and the appointment is likely to ensure the Fed policy does not come under political scrutiny and remains independent. I don’t see the appointment as a major development as the market had already priced in Yellen following Larry Summers’ announcement to the President last month that he did not want to be considered for the position.
The market digested the Yellen news within a few hours and reverted back to the soap opera of the debt crisis facing the US following the government shutdown as we seem no nearer to a resolution. The market is finally starting to think the unthinkable of a US default with President Obama stating that he is willing to talk even on Republicans terms as long as Congress acts and ends the government shutdown. The house speaker Boehner was, however, in no mood for compromise saying that he may be willing to raise the debt ceiling on a temporary basis as long as the President is willing to negotiate in that temporary period although commentators suggest this option may not get backing from the majority of Republicans.
Today we see the release of industrial production from the EU and the UK along with FOMC minutes from the September meeting where we will look to see how close the ‘no taper’ call was. Although I feel that this is rather insignificant following the US government shutdown and the view that tapering will now not start until 2014.
Supports 1.3500-1.3455-1.3380 | Resistance 1.3610-1.3650-1.3710
Supports 96.70-96.50-95.80 | Resistance 97.50-98.00-98.40
Supports 1.6010-1.5985-1.5950 | Resistance 1.6150-1.6185-1.6200
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