by Chris Becker
It was all about follow through overnight on risk markets as the continued reaction to a more dovish Fed stance flowed through to European stocks, which also saw an uptick in German CPI. This saw Euro get a strong bid as sovereign bonds were sold off and money move firmly into stocks. In the US the ADP employment print in advance of Friday nights NFP report came in very solid, even as another Fed official opined that higher inflation will still not force the Fed’s hand in raising rates. Commodities were mixed to say the least, with Brent crude rising slightly while WTI crude slumped on the weekly DOE oil inventory report even though crude processing volumes surged indicating demand might be rising domestically.
Recapping Asia’s session where the Shanghai Composite closed a nice bear trap, as the bulls pushed the bourse nearly 3% higher to pip just above 3000 points. I suggested we might see a rebound here on the Yellen stance as this changes the Yuan/USD relationship substantially. A follow through is required here or it’ll be yet another bull trap:
