FXstreet.com (Barcelona) - “With a potentially quiet week ahead for the fiscal cliff, markets might take some encouragement from Friday's news. Risk markets turned on Friday after House speaker John Boehner described talks with Obama and other congressional leaders as constructive.” notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.

The S&P500, which was down -0.75% in the morning session before Boehner's comments hit newswires, rallied more than 1.2% from the lows to close +0.48% higher on the day. Gains were broadbased with nine out of 10 industry sectors finishing higher on the day. Boehner's comments helped US treasury yields sell off 3bp to close virtually unchanged at 1.580% and the VIX to drop 2pts to close -8.8% lower on Friday.

Boehner continued the conciliatory tone on Twitter, describing his "two-step framework" for reducing the deficit that includes tax reforms and spending cuts as "consistent with the President's call for a balanced approach" and that he was "confident both parties can come together around a deal to avert the fiscal cliff". On his part, Obama said at a press conference in Bangkok on Sunday that he was "confident that we can get our fiscal situation dealt with". Treasury Secretary Geithner said that he's confident an agreement on averting the fiscal cliff can be concluded within weeks.