There was a bit of volatility to end the US session as Janet Yellen, the presumptive successor to Ben Bernanke as the next FED chairperson, sent the US Dollar reeling by the dovish tone in her prepared remarks. The crux of her missive was that only a strong recovery will allow the FED to deviate from their reliance on unconventional tools and revert back to a more normal monetary policy environment. She further stated that 7.3% unemployment rate was too high and that the economy remains far short of its potential.
The US bond market got a boost from this as they appear to have interpreted this to mean that she might not begin tapering even if the 7% threshold that Bernanke targeted was reached. The yield for the benchmark 10YR note fell from 2.73% to 2.70% which probably contributed to the Dollar sell-off, especially -vs- the Yen. Her official nomination process before the Senate Banking Committee begins at 10 AM EST (15:00 UTC) and if today's price action is any guide then the markets might be in for more volatility.
On the economic front New Zealand's Q3 Retail Sales came out at +0.3% which was lower than both market estimates of +0.9% and last quarter's reading of +1.5%. The Core component was much weaker as it posted a -0.1% -vs- +1.4% that was expected. Japan's preliminary Q3 GDP came out a bit higher than forecast as it posted a +0.5% reading though the result was a fairly severe decline from the +0.9% print in Q2. USD/JPY, which was under pressure post-Yellen, has reversed course and currently trades around the 99.70 level.