With Greece having sent the EU a list of reforms they are apparently happy with, and Greece treasury yields falling below 8.50% indicating falling fears in that arena, the focus of traders today has turned back to central banks and monetary policy. Growing differences in hawkishness and dovishness between major central banks may keep stocks and currency markets hopping for some time. Diverging stances in Europe and North America may have a particular impact on EURGBP and USDCAD trading today. The Bank of England kicked things off earlier today taking a relatively hawkish stance. Governor Carney suggested looking past current low inflation this year which could fall below zero on falling oil and food prices to the potential for a big ramp up in inflation in 2016. Meanwhile MPC member Forbes suggested interest rate increases may be needed to keep inflation pressures subdued. On the other hand, ECB President Draghi is expected to remain dovish with the street looking to his speech this morning for more colour on the ECB’s new QE program that starts in March. Similarly, we may see a growing divide between the US Fed and the Bank of Canada today which could rock the Loonie. Fed Chair Yellen starts two days of semi-annual testimony to Congress this morning. In the comments and questions, traders may be looking closely for indications of when the Fed is thinking about starting to raise interest rates. Previously the FOMC and Chair Yellen have indicated no rate increases before April at least with many Fed members and the street widely anticipating a June liftoff for interest rates. Although she may leave the door open to delay or slow interest rate normalization if needed, things appear to be on track for a midyear start to interest rate increases. The recent very strong nonfarm payrolls report combined with today’s strong earnings out of Home Depot and Macy’s which suggest consumer spending starting to pick up and subsiding risks of political chaos in the Eurozone, low oil prices and lots of stimulus out there suggest the potential for a stronger economy in the coming months making it important for the Fed to not fall behind the curve again. On the other hand, Bank of Canada governor Poloz is expected to take a more dovish stance. The BoC already cut interest rates once this year and is widely expected to do so again, particularly after last week’s dismal Canadian retail sales figures and today’s poor start to Canadian bank earnings season. At this point, traders questions related to Canadian interest rate cuts appear to mainly be circling around when and how much? Generally speaking the street appears to be expecting another 0.25% cut at the next BoC meeting so any deviation in tone from that could come as a surprise. The divides between the relatively neutral to hawkish Bank of England and FOMC on one side versus the moderately dovish Bank of Canada and stimulative (very dovish) ECB on the other could spark significant trading action in currencies particularly if we see any surprises from current street expectations. Corporate News Bank of Montreal $1.53 way below street $1.64, net income down 6% over year shortfall blamed on lower investment banking earnings, weak insurance business, slower lending and higher loan loss provisions (up 64% over year to $163M) due to the oil price crash. Macy’s $2.44 vs street $2.39, guides Jan 2016 year to $4.70-$4.80 vs street $4.83 Home Depot $1.00 way above street $0.89, sales $19.1B vs street $18.6B, same store sales 7.9% vs street 5.4%, 25% dividend increase but guides Jan 2016 year to $5.11-$5.17 below street $5.23 and same store sales growth to 3.3%-4.5% Economic News Economic reports released overnight and this morning include: NZ 2 yr inflation expectation 1.80% vs previous 2.00% Germany GDP 1.6% as expected France GDP 1.3% vs street 1.0% Eurozone consumer prices (0.6%) as expected Eurozone core CPI 0.6% as expected Turkey interest rate 0.25% cut to 7.50% as expected Hungary interest rate 2.10% no change as expected Economic reports due later today include: 9:00 am EST ECB President Draghi speaking 9:45 am EST US flash service PMI street 54.5 10:00 am EST FOMC Chair Yellen testimony 10:00 am EST US consumer confidence street 99.5 2:00 pm EST Bank of Canada Governor Poloz speaking