Today it seems to be the big day for Janet Yellen as she is due to deliver her first monetary policy speech, as the New Fed Chairman, in front of Congress. I think she will continue with the current Fed's rhetoric that QE program worked and that any further reduction in the bond buying program will be "data depending". The only think we should watch is how she will respond to the fact that unemployment rate is still above Fed target and also the inflation rate is below target.

Unfortunately for the new Fed Chairman she will have some pressure on her first hearing because of Friday's poor jobs numbers. This should be a very big risk event as market participants will pay attention to any new changes in the Fed's forward guidance policy and for sure it will set the tone for this week price action.

If you're asking me there are 2 major things the market will focus on:
  1. Fed forward guidance policy as the unemployment rate is already 0.1% from Fed's target of 6.5%, which if we take them by their word they should start raising rates when that mark is hit, but this is not the case at least for the time being.
  2. Secondly, Yellen is known as a QE support so the market participants for sure will want to know what is her view on the pace of tapering in regard with the recent poor jobs figures. And here my view is that she will stick to the current tapering plan, which is 10B/meeting.
Be aware that she'll deliver the Monetary Policy Report to the House of Representatives on Tuesday at 15:00 GMT/ 1:00 ET, then on Thursday she will testify before the Senate Banking Committee at 15:30 GMT/ 10:30 ET.

Best regards,
Daytrader21
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