It seems to be a case of all systems go for the UK economy right now, with solid economic growth, booming house prices and low inflation.

As well as the ongoing situation in Iraq investors are watching and waiting for news from the US Federal Reserve. The key Federal Reserve FOMC (Federal Open Market Committee) meeting begins on Tuesday with Chair Janet Yellen due to give a press conference on Wednesday.

Brent crude has spurted higher to near $114 a barrel and WTI oil rose over $107, levels today, a nine month high as the problems in Iraq and tight US inventories continue to worry oil traders.

The market is pretty dull right now, though moving largely upwards. Market volatility is low, valuations are high and for the contrarian investors who have been betting on a significant market correction over the last few months, for now their bets aren’t coming good.

Today Spanish 10 year bond yields went below US 10 year Treasury bond yields. In early 2012, Spanish bonds traded with a 6% premium to US bonds (8.5% vs 2.5%), that’s one hell of a reversal!

The US equity indices are at all time highs and investor enthusiasm for stocks is being driven upwards by pretty good American economic data such as Friday’s non-farm payrolls employment report for May.