Daily Market Review - 02/11/2014

Gold

Gold prices continue to rise on Monday and early Tuesday to a 3 month high, following Friday’s disappointing U.S. jobs report. Friday’s numbers were not soft enough in order to for the new Chairman to alter previous decisions but they are expected to slow down future tapering steps.

Market Overview

U.S. stocks closed modestly higher in a quiet session yesterday ahead of the new Federal Reserve Chair Janet Yellen testimony later today.

Fed Chair Janet Yellen is expected to appear before the House Financial Services Committee at 15:00 GMT and will likely face questions on the state of the labor market and its future monetary policy.

On Friday, the Labor Department said the U.S. economy added 113,000 jobs in January, well below expectations for 185,000 new jobs. The miss in expectations was explained by the extreme weather contributed to the slowdown in hiring.

The report was seen as unlikely to prompt the Fed to halt reductions in its stimulus program. The bank announced a second cut to its asset purchase program in January, trimming it to USD65 billion-per-month.

Even thought Yellen isn’t expected to change the FOMC previous decisions, markets will be looking for clues on the central bank’s plans to pare back its bond-buying program in light of the recent disappointing U.S. economic data.

Asian stock market rose sharply on Tuesday despite the poor performance out of their peers from the U.S. overnight.

The gains can be attributed to an improve sentiment follow the market’s recent declines as well as the successful 2nd largest IPO in china that took place in the early morning today.

Hong Kong’s Hang Seng Index added 1.8%, Singapore’s Straits Times Index added 0.62% and South Korea’s Kospi added 0.52%.

Shanghai traded over 1% up while the Japanese markets remain closed for public holiday.

The European markets are expected to trade sideways ahead of Yellen testimony especially since today’s economic calendar is empty.

Economic Calendar

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