Yellen Closes, DOW Closed Above 16k

US equities staged a strong rebound overnight as lifted by better than expected jobless claims numbers and the news that Yellen moved a step closing to becoming the next Fed chairman. DOW closed above 16000 level for the first time at 16009.99, up 109.17 pts. S&P 500 also rose 14.48 pts to close at 1795.85. 10 year yield edged higher to 2.839% but closed down at 2.784%. Same was seen in 30 year yield, which rose to 3.938%, hitting a new 2013 high before closing down at 3.883%. Dollar index also pared back some of the gains and is back pressing 81 level. In the currency markets, Aussie and Kiwi remained the weakest currencies this week, followed by yen and Canadian dollar. Sterling, on the other hand, is the strongest currency this week so far.

In US, the Senate Banking Committee voted 14-8 to approve Yellen's nomination as the next Fed chairman. Next would be a final confirmation vote in the full Senate after Thanksgiving. The margin is seen as unusually small compared with past nominations. Yet, the Senate changed it rules yesterday so that Yellen would only need 51 votes to confirm, instead of 60. Hence, the she is virtually guaranteed for the post. Yellen is widely seen as a dove and at her confirmation hearing last week she emphasized that it's " imperative that we do what we can to promote a very strong recovery."

Dollar and treasury yields were boosted this week as FOMC minutes said Fed tapering could happen in the coming months. IMF deputy managing director Zhu Min warned that tapering would be a "key source of risk" in the emerging markets. He noted that "global growth is in low gear and downside risks persist". And, recovery in advanced economies is "hindered by constraints on both the demand and the supply sides". Meanwhile, “emerging markets are still in the lead, although they are slowing down from elevated levels in recent years.”

Elsewhere, SNB board member Zurbruegg said that the Swiss Franc's "minimum exchange rate will remain a necessary instrument for the foreseeable future." And, the SNB remained "prepared to enforce the minimum exchange rate by buying foreign currency in unlimited quantities if necessary, and to take further measures as required." He said the value of the Swiss Franc "remains high" and "there are no inflation risks". He noted that "with interest rates at zero, the minimum exchange rate prevents an undesired tightening of monetary conditions in the event that the upward pressure on the Swiss franc should intensify once again."

On the data front, German will release Ifo business claim today and a slight improvement is expected in the month of November. Germany will also release Q3 GDP final reading. Canadian data will be the focus in US session as CPI and retail sales will be released.