Last week saw Janet Yellen live up to her dovish reputation and rumours that she was set to follow in the footsteps of Ben Bernanke; however, even with the security blanket her comments laid beneath equity markets, Europe has yet to fully move into a ‘risk-on’ mentality. A full economic diary for the following three days may provide ample opportunity for the markets to be given direction, but with a number of the Federal Open Market Committee members talking over the next couple of days, there could be a consensus shift on how solid Ms Yellen’s dovish stance actually is.
Tomorrow will also see the minutes for the last Bank of England meeting released, as well as the results of how everyone voted. With an improving UK economic picture developing over the year, Mark Carney’s stance on holding interest rates unchanged for such a long period of time could well come under pressure.
Europe too will have plenty of data on release and the ZEW sentiment figures will reflect how worried the investment community is over the European Central Bank’s surprising interest rate cut. Today could very well be the calm before the storm.