Morning all.. Stocks rallied strongly in the US after Yellen sounded just a little more dovish on future rate hikes and seems to be concentrating now on balance sheet reduction. Yellen still sees problems with wage growth and says it seems somewhat low given 2% inflation objective, low productivity limiting wage growth; fair to say Fed is “gentle applying the brakes”; valuations are generally towards the top end of historical ranges; financial stability risks are moderate.. The S&P closed up 0.73% and NASDAQ up over 1%. The euphoria didn’t last into the Asian session though as Nikkei was capped by a weaker USDJPY and finished up marginally but HK was up nearly 1%. Whilst USDJPY traded below 113.00 the move is still small and dealers feel the market is still rather long. GBP held around 1.2900 after BoE’s McCafferty (Times): said BoE should review its policy of leaving QE unch until interest rates are close to 2%; “given that other CBs are thinking about it, thinks it would be remiss of us not to at least think about it”; is minded to vote for a 25bp hike again in August, cites strong jobs data and 42y-low unemployment; expects consumer growth to slow and infl to peak “at over 3%”..UK BCC Q2 Survey: overall economic activity was subdued in 3mth to end of June; some sectors in survey were robust with manufactures reporting fastest export growth in 3 years, service sector had biggest increase in foreign sales for over a year; these two sectors more upbeat about total sales outlook over next year than at any time since Brexit vote; however, service relies on UK consumers who are suffering from highest inflation rate in 4 years. However, UK RICS June House Px Balance: 7% vs 15% cons and 17% prev (11 month low); 44% of survey respondents blamed domestic political uncertainty, 27% blamed Brexit concerns. This morning we get the regional and national CPI across Germany along with French, Spanish and Swedish CPI.. Good luck.