What Happened Last Night ? Who Is Telling Who What To Do ?

JOKES.

Draghi speaks on Monday night.

Market Mood Monitor.

Yellen spoke last night.

Market Mood Monitor.

The market was waiting for the reports/interpretations and the reporters/interpreters were waiting for the market to decide if the speech was dovish or hawkish and it was a case of a blind leading blind struggle to decide on whether it was a risk on or risk off event.

First headlines.

And first market reaction.

And so the reporters went on to say it was DOVISH.

And when the reporters said it was DOVISH, the market continued on its way.

10Y US Treasury Yield last night.

That proved to be short lived because markets were reading the alternate news sources which highlighted Yellen’s comments that biotech & social media forward PE ratios are ‘high relative to historical norms’.

And her observations that “Signs of risk-taking that could leave parts of US financial sector vulnerable to adverse events have risen modestly from subdued level“.

And the key one which came early but reporters missed and as such, traders who rely on reporters miss. “increase in Federal Funds rate will likely occur sooner and be more rapid if labor market continues to improve”

Thus market players react and market talk of a massive 1.5 bio in futures went through, EUR collapsed and the headlines changed from GAIN to DROP. Suddenly, reports are saying that it is less dovish than expected.

EURUSD chart during Yellen’s testimony.

I am guessing that most analysts wait for the market to give them the verdict when the market was waiting for some form of analysis before they react.

And Yellen remains right on top of things, in our new market order.