It’s been a flat opening for the FTSE 100, CAC 40 and DAX 30 as the bulls and bears continue to trade punches.

There was excitement after the close of US markets last night as Apple smashed its earnings estimates. Unfortunately this excitement has proven to be short lived and there has been a steady decline in optimism overnight.

Investors didn’t get anything too bullish from Fed chairman Ben Bernanke. Other company announcements from those such as Yahoo were a muted affair.

After such a spectacular run over the last week, a bout of profit taking or buying fatigue is natural.

At 08.30 GMT today we have the release of the minutes from the last MPC meeting, followed by Canadian retail sales at 12.30, then at 14.00, Fed Chairman Bernanke continues his testimony.

Aside from a number of middle tier economic announcements, these will be today’s main market movers today.

Trading Sterling/Dollar

The pound is getting hammered in early trading, most notably against the dollar. Investors are taking fright at the size of the UK debt mountain and news that up to 9% of tax revenue could go to debt repayments in the next 5 years.

Money is flowing back into the perceived safety of the US dollar and Japanese Yen.

$1.6500 looks like it’s becoming a tricky level to surpass for the GBP/USD cross rate. A Fixed Odds Bear Trade predicting that GBP/USD will close below $1.6500 mark over the next few days could be a way to play this.

Also see FX Spread Betting.

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