Breakfast Blog

Good Morning,
                        Big Risk event from the across the pond today in the form of Ben Bernanke's testimony on the American Economy and the future Asset Purchases the Federal Reserve plans to make. Many analysts are calling for a tapering of purchases because of the Stronger American Economy however their is one thing you can always rely on and that is for Ben Bernanke to be uber dovish. He is not called "Helicopter Ben" for nothing. Refering to his printing press of money in the form of the Federal Reserve.
We can not see this being a stock negative event, whatever he says will likely be taken as bullish by the Stock Market. If he suggests a tapering in Q4 2013, it shows the Economy is stronger and more resilient. This will cause a flow out of Safe-haven assets (Gold, CHF, JPY) and into stocks. While reference to continuating accomodating monetary policy will further inflate Asset prices.
This morning should be quiet with all eyes on the 3 P.M. speech from Bernanke. Just as i type the EUR/JPY has reached a three and a half year high in the pair and has broken the 133 Handle. This was under 100 at the start of November. USD/JPY remains well bid at 102.8 Spot. The Nikkei 225 put on another 2% over night and sits at 15712, up over 6000 points YTD and accelerating . This index has gone parabolic and may continue its upward trajectory into Japanese earnings season as most companies are expected to report solid earnings in wake of the weaker JPY currency and the positive effects it has seen on its exporters.
Euro was the leading currency yesterday and has continued its gains this morning. Making gains against the Pound, Dollar and Yen. The catalyst behind the Euro move yesterday was the break of 0.85 to the upside in EUR/GBP pair which was a downward sloping trendline and proved to be a major break out level supporting the Euro in nearly all its crosses.
Sterling weakened heavily against most pairs yesterday as the monthly CPI came in weaker then expected, leaving Mark Carney the incoming Governor with some additional leverage to print when he arrives into the Bank of England next month. Selling Sterling looks a solid fundamental trade for the coming months as technically it has broken through some big levels against Euro and against the Dollar and the FTSE is certainly pricing in more easing as it broke 6800 yesterday with analysts as Cityindex expecting to see 7250 before the end of 2013.
Good luck in the Markets today
Lowkey