Good morning,

Risk taking continued in global equity markets after Fed's Yellen announced that the markets should expect the Fed to stick to the plan with regards to tapering and also that labour markets had additional upside, supporting positive growth and general expansion in the US. As there were no significant news from Europe, the testimony from Yellen was the key event of Tuesday. Euro Stoxx took home 1.5% and the leading indices in the US staged a rally between 1-1.2% - the Dow approaching 16,000 again with next resistance at 16,040. The positive mood spilled over into the Asian session, where the Nikkei 225 took home 0.5%, Hang Seng 1.5% and the S&P/ASX 200 increased 1.1%.

In FX markets, the US Dollar weakened against most peers, except for the EUR and the JPY. EUR/USD is positive for the week, but is struggling with the 50-day SMA and trend resistance from the Dec 2013 top. USD/JPY is just hanging on to the daily Ichimoku Cloud base, where a close below could turn technicals negative.

Overnight, the Chinese Trade Balance as as well as the preliminary Japanese Machine Tool Orders for January surprised positively, which made market players take additional longs in risky assets, also supporting emerging markets, which during recent turmoil have taken some damage.

Today, the focus before lunch will be on GBP-pairs as the Bank of England will be releasing their Quarterly Inflation Report at 10:30GMT, revealing the latest outlook on growth and inflation. Cable has been well bid recently and took out the 50-day SMA yesterday, indicating that more upside could be in play. The question is whether or not the BoE will review the forward rate guidance, which they introduced in August last year.