Markets Seemed Unfazed By Bernanke

Asian markets had a mixed day as the Shanghai lost ground. This comes as home prices, in China, came in higher than expected and investors brushed off U.S. Fed Chair Ben Bernanke’s testimony which stuck to the script. He confirmed there was no set timetable for winding down the U.S. stimulus program.

Bernanke testified in his semiannual congressional monetary report that the Fed will begin to taper back its bond buying back program later this year. However, this could change if unemployment rises or inflation remains below the target of 2 percent.

China reported today that home prices rose 6.8 percent. Economist expected a rise of 6 percent. This led to a sell off in developer and land reality companies on the Shanghai.

STOCKS

Today, the Nikkei was up setting an eight week high. The South Korean Kospi lost 0.6 percent while the Australian S&P/ASX was unchanged at 4,990. On mainland China, the Shanghai Composite has now hit a one week low.

European markets were quite happy with Bernanke’s testimony. The FTSE in London was up 0.2 percent, and both the DAX and CAC 40 closed up 0.6 percent yesterday.

U.S. markets were also higher yesterday as the DJIA rose 18.67 points and the S&P 500 eked out 4.65 points. The NASDAQ rose 11.50 to close out 3,610. Yahoo jumped 10 percent after the internet giant beat earnings expectations. However current quarter guidance fell short. Seven brokerages raised their target yesterday on Yahoo.

CURRENCIES

The EUR/USD is now trading around 1.3097 after failing to break above 1.3170 yesterday. We see strong support at 1.3075. Please see the below EUR/USD chart. The Euro could find support as yield spreads are narrowing. The 2 year spread is -0.21 percent and the 10 year spread is at -0.93 percent.

The AUD/USD has fallen, following gold and copper. The market is now trading at 0.9173 and has good support near 0.9160.

COMMODITIES
Copper found strong resistance at 3.20 and retreated as expected the metal is now trading near 3.1225. Strong support sill lines up at 3.10 and we could see some sideways trading from 3.18 back up to 3.20 for a little while.

Gold is also trading down and could test 1200 after reaching a high at 1299.70. Silver is following gold as it falls after hitting a high at 20.18. Silver is trading at 19.325 and looks bearish now.

TODAY’S OUTLOOK
Fed Chief Bernanke will conclude his testimony before Congress today. We do not expect any surprises to come from his speech. We will be getting some numbers out of the U.S. as well today as the Philadelphia Fed Survey, leading indicators and the Fed Balance Sheet (money supply) will be released today.