Janet Yellen steps up to the plate

Quick Recap

Weaker US data last night highlights that the US data pulse has been falling for some time now. It’s been the perfect opportunity for Euro to rally. But of course it hasn’t because of the continuing Greek mess. That’s not to

On that front the Euro is back at 1.1330ish this morning because news of a delay in the presentation of the Greek plan to the Eurogroup till tonight has bred concerns that  the first plan, circulated privately, was rejected by Germany or someone else within the Eurogroup. It’s another wrinkle in what could have been a really positive time for the Euro as I discussed in yesterday afternoon’s Asian Wrap.

It seems time has run out for a decent Euro rally now as it slips back against the US dollar and against the GBP in particular.

That is unless Janet Yellen gives a hint of the Fed holding fire on the first rate hike when she walks up Capitol Hill to address Congress tonight. There are bound to be plenty of questions about the state of the economy and labour market and consumers in particular.

This is particularly the case given that data in the US was on the weaker side again overnight. This continues the recent run of downside misses which has taken the US data pulse (Citibank economic surprise index) to its lowest level in years. What that tells us is that economists have been more positive on the US growth profile and data releases than what the actual data has revealed about the US economy.

On stocks last night the Us was down a little, Boeing weighed on the Dow but overall markets hardly moved in any material manner. In Europe though the difference in sentiment between stocks bulls – in love with Mario Draghi and free money – and Euro traders could not be more stark. New highs were seen in stocks even as the Euro slipped and Greece procrastinated. Oil was lower again in messy trade as well.

Interesting times.

On the day

On the data front today we get the weekly ANZ consumer confidence index, but tonight is huge. Both ECB president Draghi and Fed chair Yellen are talking. German GDP for Q4 is out as is EU CPI and of course, the Eurogroup meeting about Greece. Consumer confidence in the US is big and the Case Shiller house price index is worth watching also.

And here’s the overnight Scoreboard (9.30 am AEDT):

• Dow Jones: down 0.13%, 23 points to 18,117
• Nasdaq:up 0.1% to 4,961
• S&P: flat at 2,110
• ASX SPI 200 Futures: rose 14 points to 5,862
• FTSE:  down 0.05% to 6,912
• AUDUSD: 0.7804
• EURUSD: 1.1334
• Crude: $49.2
• Gold: $1,201

CHART OF THE DAY:

USDCAD – Trying to break?: The BoC Governor speaks tonight after Janet Yellen. What he says about the economy will inform the price action which looks like USDCAD is trying to break higher.

Of course that’s just a reflection of an overall improvement in the US dollar.

We know 1.2350 is solid on the topside and while below 1.2695 this is just a range trade.