Bankers' remorse

US Federal Reserve Chair, Janet Yellen attempted to “right the ship” in her first speech since the board decided not to lift US rates in September. Her re-iteration that the Fed plans to lift interest rates this year. The signalling effect of her speech is lifting risk currencies and US share market futures, suggesting the Asia Pacific zone may shrug off negative overseas leads and post gains today.

Yellen’s speech may indicate dismay from the board at the unintended consequences of last week’s no change decision and the accompanying laundry list of economic woes. No doubt intended to convey reason and transparency, they instead saw sentiment plummet and volatility increase. The immediate market responses include point to a restoration of confidence that markets can sustain through rising US rates.

CPI and PPI data released in Japan this morning may add to the positive sign, with the core CPI reading of a 0.8% gain in August beating forecasts and indicating benefits from the three arrows stimulus program. A better night for commodities, including oil, copper and gold, could see additional support for the Australian index.