Risk off on Middle East tensions

<p>The JPY and the CHF are the main beneficiaries in FX space following the meltdown in the risk environment. Saudi Arabia along with its allies […]</p>

The JPY and the CHF are the main beneficiaries in FX space following the meltdown in the risk environment. Saudi Arabia along with its allies within the region announced on Wednesday night that it had initiated military action in Yemen, with the latest reports suggesting that a ground evasive has followed on from overnight airstrikes. Saudi Arabia and its member states are looking to restore the Yemeni Government following the invasion by the Iran backed Shia Houthi rebels. Not surprisingly WTI futures are trading above $51 this morning. The analysis shows that Yemen is not a large oil producer within the region but is more geographically important in terms of shipping. The conflict will again put pressure on US and Iran relations just as sanctions looked to be loosened, with talks seemingly constructive between the two nations on Iran’s nuclear programme.

The latest comments from Federal Reserve officials have been broadly in line with the overall FOMC statement from Chair Janet Yellen. Chicago President Charles Evans suggest they are in no hurry to hike rates as they continue to monitor growth and have faith in the 2% inflation target, as both Stanley Fisher and Dennis Lockhart suggest rates are likely to rise later this year.

The only data out today will be the weekly initial jobless claims data from the US as we also hear from FOMC voting member Dennis Lockhart. The Czech Central bank also meet at midday where the EUR/CZK floor at 27.00 will likely be discussed.



 1.0780-1.0615-1.0580 | Resistance 1.1080-1.1110-1.1250



118.30-117.80-116.70 | Resistance 120.00-121.55-122.45



Supports 1.4830-1.4635-1.4550 | Resistance 1.4995-1.5030-1.5170

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