Markets uninspired after Bernanke testimony

Markets uninspired after Bernanke testimony

By William Leys (Premium Client Manager, CMC Markets)
18 July 2013

The Australian market has followed the lead of the US and is marginally higher in morning trade.

Trading has been relatively subdued this week, in stark contrast to the volatility that has characterised the market in recent times. Traders and investors had been bracing for Dr Ben Bernanke’s testimony to Congress overnight, as this was expected to provide some short term direction for equities and foreign exchange. There was much conjecture over which Ben would turn up – the easy money dove or a more conservative chap intent on reigning in the stimulus.

However, what we got was something in between. The Federal Reserve chairman was non-committal about any tapering timeframe and stated that any wind down will be dependent on how things pan out throughout the course of the year. With Bernanke essentially sitting on the fence, the reaction of the market was predictably low key with Wall St eking out a minor gain.

Similarly, the local market remains uninspired. This morning’s NAB Quarterly Business Confidence release has come in below expectations, which may prompt our index to fade going into the afternoon.

The AUD gained slightly overnight, following Bernanke’s uneventful testimony, but has since retreated to be trading back around the 92 cent mark against the USD. Like the equity market, there has been a lack of recent impetus, but that may change tonight with the data on jobless claims due out of the US. A positive read will likely strengthen the USD, at the Aussie’s expense. Alternatively, a weak read could see the AUD push toward 93 cents.

www.cmcmarkets.com

ENDS

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