The DAX is trading at 9410, up 1.25%, as traders get their long positions in place before Ms Yellen makes her first testimony before Congress. In January, Ben Bernanke’s term as chairman of the Federal Reserve came to an end. During his tenure unemployment dropped to a five-year low and he trimmed the stimulus package. As Ms Yellen is known to prefer more stimulus to less, dealers are speculating if she will want to avoid tapering for the next few months.
Ms Yellen will engage in a question-and-answer session from 3pm (London time) and traders will be listening for any clues about what her intention is in relation to the quantitative easing scheme. There are no other major economic announcements expected today so all focus will be on Ms Yellen.
As Alastair McCaig mentioned, the DAX is above the support line of 9102, and if Ms Yellen states the US economy is not ready for additional tapering it could put the recent highs of 9700 in sight.