Yellen Is Not Loving It, Markets Do — MM #152

The dollar and bond yields were on the back foot while stocks advance on a mix of Yellen’s testimony on inflation, inflation itself and politics. We break down the events and look towards a hot summer.

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  1. Yellen’s testimony: In the Fed Chair’s testimony, the tone became more cautious about inflation. Is the confidence gone? “Rates don’t need to go much further”. Bonds certainly reacted.
  2. Donald Junior: The latest episode in the Trump scandals had a bigger impact than usual and perhaps set the ground for a softer dollar.
  3. US data somewhat slower: Inflation and retail sales disappointed and sparked the wider dollar sell-off. Is everything that bad? We tackle the data from various angles and give our verdict about the data and what it means for the Fed.
  4. Winners against the dollar: We run through the weaker and stronger currencies that are in play against the dollar.
  5. Unwinding the Trump train: Politics are not that strong anymore, but we point out one topic, trade, in which the President could make a move.
  6. Preview: The Draghi show is the main event of the week, but he might try not rocking the boat. Also, note the BOJ decision, US housing data, Chinese GDP, UK inflation figures and more.

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