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It is Veterans Day in the US today: although most of the financial markets are still open, the bond markets are shut, there is an absence of economic reports and many people are on holiday. The upshot is that trading volumes have been thin and price movements have generally been slight.
By early afternoon in New York, the Dow had crept up just 0.08% or 12 points to 15,773, adding to the record closing price achieved on Friday. Similarly, the S&P 500 and NASDAQ 100 edged up very small amounts, both gaining 0.04%, leaving the S&P 500 at 1771.4, less than one point from its all-time closing high.
The US benchmark indices have managed to retain some of their upward momentum, therefore, in spite of Friday’s strong payrolls number that has revived speculation that the Fed might taper sometime in the near future. While I think this remains unlikely given the current levels of US inflation and unemployment, it does provide an intriguing build-up to Janet Yellen’s testimony in front of the Banking Committee in the US senate on Thursday. Ms Yellen has been nominated to replace Ben Bernanke as the Fed Chairperson, and her speech is likely to offer insights on her position on monetary policy.
The strength of Friday’s US jobs report and the ECB rate cut on Thursday contributed to a substantial drop in EUR/USD last week, but the currency pair has recovered somewhat today, bouncing 0.27% to 1.3406.