Yellen Boosted US Equities, While Yen Stays Weak

US equities were boosted to another record high after Fed chairman nominee Yellen warned of withdrawing stimulus. DOW rose 54.59 pts to close at 15876.22 while S&P 500 rose 8.62 pts to close at 1790.62. Treasury yields dived initially but pared some losses before closing. 10 year yield ended down -0.023 at 2.702% after dropping to 2.686%. 30 year yield ended down -0.029 at 3.80% after dropping to 3.764%. Dollar index, however, recovered and is back trading above 81 level for the moment. In the currency markets, though, the dollar remains down against most major currencies this week, except versus the yen and aussie.

In her confirmation hearing to Senate, current Fed vice, chairman nominee Yellen warned that, "it's important not to remove support, especially when the recovery is fragile". And, "available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero." She hailed that the quantitative easing program "have made a meaningful contribution to economic growth and improving the outlook." Some analysts said Yellen has given the impression that Fed would taper the asset purchase later. And, there were speculations that Yellen could keep federal fund rates at the current near zero level until 2016, or maybe even 2017.

Looking ahead, Eurozone CPI final reading in October will be released in European session. The CPI is expected to be finalized at 0.7% yoy while core CPI is expected t be at 0.8% yoy. Canadian manufacturing shipments are expected to grow 0.2% mom in September. From US, import price index is expected to dropped -0.5% mom in October. Empire state manufacturing index is expected to improve to 5 in November. Industrial production is expected to rise 0.1% in October. Wholesale inventories are expected to rise 0.4% in September.