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Hardy: Beware the sense of panic in the markets

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Even before Janet Yellen had got to her feet, Saxo's John Hardy was dismissive of the testimony she was presenting to US Congress. The market was crying out for help, but he says she ingored it, and failed to inspire confidence. This highlights his belief that central banks have lost the ability to sway markets with guidance. 

This Thursday the markets are nervous with USDJPY exploding to the downside and EURUSD to the upside. But it's not all about dollar weakness. Hardy says it's stronger against the Aussie dollar and the Kiwi plus some EM currencies. It's all about liquidity in the markets, he explains, with USD liquidity very deep.

John's concern is that there is a sense of panic and the markets could move another leg lower. He warns that traders need to be extra cautious particularly as key support levels in USDJPY and EURUSD have already been broken. He believes the market needs a big bazooka to stop this move downwards. "Certainly the Fed and Yellen are not providing that support," he concludes.