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Hardy on Yellen, bubbles and the dollar
Janet Yellen, nominated to be the new boss of US Federal Reserve, says she’ll continue with the central bank's monetary stimulus. Saxo Bank's John Hardy says: her testimony is very much a "continuity" of Bernanke's dovish attitude, effectively "putting the market to sleep" - we had very little reaction.
Speaking to the Senate Banking Committee, Yellen also downplayed the threat of asset bubbles and said: “Stock prices have risen pretty robustly but if you look at traditional measures, you would not see stock prices in territory that suggest bubble-like conditions.”
But John disagrees with this statement: “I would certainly beg to differ but that’s her assessment. I think the equity market is taking this as a green light to continue to rally, suggesting the fed taper is off in the horizon somewhere.”
John explains investors are still waiting to see what the dollar will do off the back of Yellen's speech. He says dollar yen has made some interesting progress and "there’s a lot of range left to play with", but elsewhere, the picture is very mixed.
01:35 minutes
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