EURGBP: Support at 0.7100/0.7085, resistance at 0.7166/0.7200

The markets have taken on a mixed outlook in the wake of the FOMC minutes on Wednesday. There has been an element of uncertain consolidation which has stopped the dollar recovery in its tracks and given financial markets far more of a rangebound feel. There has been a slight dip back in Treasury yields which is supportive of mild gains on Wall Street, but I remain concerned that the creeping gains on the S&P 500 (+0.2% last night) are still not coming on positive news. Yesterday’s data was once more a damp squib, with existing home sales and the flash PMI both disappointing. Overnight the Asian markets were mixed to higher, with the Nikkei 225 gaining just 0.2% unable to gain any upside traction off the Bank of Japan which sat on its hands once more; although Shanghai and Hong Kong markets were firmly higher. European indices are trading mildly higher in early exchanges.
In forex trading there has been an early move against the dollar which is suffering against all the major currencies. The Traders will be looking towards the comments of Janet Yellen who is speaking at around 1800BST and after the economic data has remained weak since the latest FOMC meeting it will be interesting to see her take on that. Prior to that though there will be the German Ifo Business Climate indicator at 0900BST which is expected to just slightly fall back to 108.3 (from 108.6) having not seen a decline for 6 months. There is also the release of US CPI at 1330BST which is expected to show the headline figure of -0.1% and a core of +0.2%, both in line with last month and suggesting that inflation remains firmly anchored. Volumes may be a touch light today coming ahead of the Memorial Day weekend in the US, whilst the UK also has the Whitsun bank holiday on Monday.