All eyes on Bernanke testimony today

<p>The FX markets consolidated in Asia ahead of the all-important Bernanke Testimony to Congress today and tomorrow, where the markets are hoping that the Fed […]</p>

The FX markets consolidated in Asia ahead of the all-important Bernanke Testimony to Congress today and tomorrow, where the markets are hoping that the Fed Chairman will clarify when tapering will begin on its $85 billion a month bond buying programme. With a change to the usual schedule, a prepared transcript will be released at 1.30pm (London time) with the Chairman to take to the seat at 3pm. The markets will be looking for a reiteration of last Wednesday’s comments that the US policy will be highly accommodative for the foreseeable future although let’s remember that Bernanke today has to give the entire FOMC view, not just his own dovish stance. The FOMC minutes last week revealed that half of its members believed in faster tapering than the chairman himself. It’s not going to be easy for the Chairman today but I believe he will sit on the fence, criticising the markets for over reacting whilst keeping us very much data focused. He is likely to emphasise that tapering doesn’t mean tightening and that inflation is low and unemployment remains elevated, with the tapering timetable flexible if the economy doesn’t deliver on the FOMC’s dual mandate.

The BoE minutes will be released this morning at 9.30am where will find out if incoming Governor Mark Carney voted for further QE and if the forward guidance policy will be initiated in August. The minutes will also indicate whether this is  going to be based on unemployment like the Fed or growth focused.

We do have some data releases today in the form of the UK jobs report this morning and housing starts from across the pond, whilst at 3pm (London time) there will be a policy announcement from Canada but all of this will be secondary to the above events.



Supports 1.3020-1.2990-1.2920 | Resistance 1.3210-1.3300-1.3340


Supports 98.85-98.25-97.60 | Resistance 99.80-100.50-101.60


Supports 1.5070-1.5010-1.4960  | Resistance 1.5150-1.5190-1.5225

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.