Risk on ahead of Janet Yellen speech tomorrow

<p>Global equities look to have stabilised, allowing FX risk trade to catch a slight bid. This is despite another weak US jobs report that, like […]</p>

Global equities look to have stabilised, allowing FX risk trade to catch a slight bid. This is despite another weak US jobs report that, like last month, had Fed officials remind us that the data is weather distorted.

Taper is looking to continue at $10 billion per month. The market seems to be waiting for Fed Chairwoman Janet Yellen’s assessment of the economy at her testimony to Congress on Tuesday. Most were expecting her to echo the comments of Eric Rosengren last week that they are willing to risk some longer term inflation in order to restore balance to the labour markets.

The euro shrugged off negative weekend press articles suggesting Italy has rejected the idea of setting up a ‘bad bank’ and that European banks are facing a potential €50 billion capital shortfall as the CFTC showed a reversal in positioning from long to a $2.3 billion short.

Elsewhere, Toyota motors have, like Ford and Holden, announced that they will stop production in Australia by 2017, shedding a further 2500 jobs, although the reaction to AUD has been muted.

There are no data releases today apart from Canadian housing starts. My highlights this week will be Janet Yellen’s testimony along with the UK inflation report, where I expect a small amendment to forward guidance.



Supports 1.3600-1.3550-1.3475 | Resistance 1.3680-1.3700-1.3740


Supports 102.20-101.60-101.45 | Resistance 102.60-102.85-103.55



Supports 1.6350-1.6300-1.6250 | Resistance 1.6450-1.6485-1.6520


Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.