Last night US markets were heading for a third consecutive (albeit slender) up day in a row. This was until Fed chairman Ben Bernanke spoke in front of the senate committee, issuing some very cautious projections on the US economy.

Most of what he said was already presented in the recent FOMC statement, nevertheless the markets sold off all the same. Bernanke says he sees “Subdued inflation and only a gradual employment recovery the next couple of years.”

The Dow Jones finished the day over 1% lower, with the wider S&P 500 finishing over 1.28% lower after Starbucks disappointed with its latest earnings.

Forex Trading

This morning, the yen is in demand as investors shun risk and seek relative safe harbours. The Dollar/Yen is down 0.53%, the Pound/Yen down 0.45% and the Australian Dollar/Yen down 0.70%.

Away from the yen, the US dollar is mixed with small gains against the Australian dollar and Canadian dollar, but losses against the euro and Swiss Franc.

Coming up today we have a slew of French, German and Europe wide manufacturing/ services data from 08.00 to 09.00 GMT. Following this we have UK retail sales at 09.30 with a slight drop on last month’s figure expected.

Canadian retail sales follow at 13.30 with US unemployment claims released at the same time. Fed Chairman Bernanke continues his testimony at 14.30, though I suspect the market reaction has already happened with yesterday’s testimony.

Of most interest is US existing home sales at 15.00. Last month sales severely disappointed so all eyes will be on this announcement.

Finally we have the Canadian Monitory Policy Report at 15.30 GMT, followed by the press conference at 16.15.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.