Morning Update – 11/02/16 – by Arjun Lakhanpal

Morning all.. A wild NY session yesterday after Yellen statement and Q&A which saw the S&P up and down but closing near unchanged with the Dow down 0.6%. Asia saw Japan closed but HK re-opened and fell over 4%.. China remains closed till tomorrow. Overnight we also saw further steep losses on USDJPY making a low of 112.28 before comments from the BoJ suggesting they are looking to see if this JPY strength is speculative but the have said this before and the rally has been shallow to say the least. Not helping the risk scenario is that oil is lower again trading just above $27.00.. Gold is up at $1207.00. A big reason behind the rally in Gold this year has been a flight to quality and the fading expectations of further Fed tightening in the next twelve months.. The US yield curve flattened again and some starting to suggest that a US recession may be forming…Turning to the day ahead, there’s not a lot for us to report with no economic data of note due out in Europe and just the latest weekly initial jobless claims data due in the US this afternoon. Instead the focus will again be on Fed Chair Yellen when she is due to speak in front of the Senate at 3pm GMT. Her prepared remarks could mirror what she said yesterday so the focus will be on the Q&A. Good luck..