The IMF and the European Central Bank say the euro zone recovery is at risk. In the meantime markets nervously await the Federal Chair's testimony in Congress later today. Fortis Chief Strategist Philippe Gijsels says a combination of warnings on the euro zone recovery, worries about China and uncertainty ahead of Yellen's testimony are proving a real headache for investors.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (JULY 15, 2014)

1. FORTIS BANK, CHIEF STRATEGY OFFICER, PHILIPPE GIJSELS, SAYING:

JOURNALIST ASKING PHILIPPE GIJSELS: 'We have the IMF comments there, ECB and also Yellen later today. What are you watching the most closely, what's going to matter to markets most?'

PHILIPPE GIJSELS: 'Well, both of them clearly because there's still, as you mentioned, the central bank game, a lot of the rally in equities that we have seen over the last months and years, even as we're driven by our own liquidity put in by the central banks. So any change to that can have a very big market impact. So a little bit longer term, it will be very important what Draghi does, but of course, he has already done quite a bit in the short term. We'll probably have QE towards the end of the year, maybe the beginning of next year. Short term, there's of course, Janet Yellen and I think she will be very careful in her wording. She will probably indicate that the job market has improved, inflation has peaked a little bit up, but on the other hand, there are still quite a bit of slack in the economy and therefore, she will be very careful to withdraw the stimulus because also, the U.S. economy and especially world markets are very dependent on the liquidity that the Federal Reserve is providing.'

JOURNALIST: 'What's your base case for the ECB? Do you think Draghi's going to announce Q3 and by when?'

PHILIPPE GIJSELS: 'Well, it will be a little bit later because now let's say after the summer, we will start with the targeted LTROs that will buy them another couple of months but with all the actions, even though they were quite spectacular, will probably not drive inflation any higher so it will stick with the very low inflation level or even deflation level as some say. So that's the point, and at some point in time, you will almost be forced to QE and the markets will start discounting that. And therefore, I still think that equities might be okay because the Fed will gradually taper a little bit. We start talking about the first rate hike in the United States but I think that the ECB will make up for the difference, they will inject liquidity. So I think the market will still reflow it to liquidity.'

JOURNALIST: 'So, Philippe, with all that in mind, what are you saying to investors in the short term? I guess equities, the only game in town, right?'

PHILIPPE GIJSELS: 'A little bit longer term, they clearly are. We're still very much overweight equities at the moment even though we know it's very artificial because it's not really based on a strong world economy, not even based on earnings but very much based on what central banks are doing. That's not without risk. In the short term, you've taken some money off the table. We're still overweight, but a little bit less overweight than we were because we see that the market is technically overbought. Very much at the moment, we go up day after day almost without volatility. It's been 31 months since we had a serious correction, so that's historically a very long time. Typically, the summer months and especially September and October tend to be a little bit more nervous and volatile, so we've taken some of that overweight off, we're still have an overweight but we plan buying some more at the moment if we see a correction of 3% to 5%.'