Asian markets were down today following a selloff in US equity markets overnight. Lower than expected US consumer confidence numbers dampened risk appetite, pushing the Dow Jones Industrials down more than 100 points to 10282.41. European markets were flat, lacking clear direction as investors wait to hear from Fed Chairman Ben Bernanke today.
The Rate Debate
The euro was slightly firmer as market participants were cautious ahead of the highly anticipated Bernanke testimony before the House Financial Services Committee today at 10am in New York. Traders are looking for assurance that the Fed has not yet embarked on a monetary tightening policy, and for clues to a possible timeline on interest rate hikes. In his semi-annual report, the Chairman is expected to provide an outline on an exit strategy for the extraordinary measures taken during the worst recession since the 1930s. Consumer confidence fell to a 10 month low in February, sparking fears that unemployment may be weighing heavily on spending that is needed to sustain the economic recovery. Meanwhile, strikes in Greece over austerity measures once again have eyes on the debt-laden country. With the IFO economic sentiment falling yesterday, the single currency still faces considerable opposition as uncertainty about the strength and sustainability of the recovery in the Eurozone continues to plague the region. The euro tested the 1.35 handle today before settling around 1.3545. Support levels appear at 1.3460, 1.3385, and 1.3310. An upward move past 1.3660 leaves room for further gains to 1.3740 followed by 1.3830.
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