No QE From Bernanke, China Services PMI Up Next

Volatility ebbed in markets in the lead-up to Fridays non-farm payrolls report. NZD was the top performer and GBP lagged but overall changes were miniscule. Its growing likely that Greek PSI talks will drag into the weekend. Chinese non-manufacturing PMIs are the highlight of the upcoming session. Late Thursday nights Premium Intermarket Insights will look ahead of the US jobs report, focusing on EUR, gold and oil, coming up shortly.

EUR/USD recovered in US trading after falling to 1.3086 midway through the European session. As Europe closed, it pushed to 1.32, falling just short.

Bernankes testimony in the House was not notable for what he said but rather, for what he didnt say. The Fed Chair did not offer any hints at impending QE. He was downcast on the economy and focused on the uncertainty. On Europe, he was particularly negative.

The Feds Evans, a dove, may have helped to dim the outlook for further quantitative easing saying that additional action will probably be take only when conditions are somewhat different.

This differed from his dovish BOE counterpart, Adam Posen, who said he sees a case from more asset purchases. His comments weighed on the pound.

Greek and Troika leaders continue to grind on trader nerves, repeatedly saying a PSI deal is very close and that the differences are very minor but no deal has yet been announced, with official losses as the sticking point.

Hopes for a completion of the deal were dealt a setback by Greek coalition partners who said they will not Troika-mandated support austerity measures that included lowering the minimum wage and salary cutbacks. Papademos has scheduled meetings with them on Friday and Saturday. Greeces fin min has said Sunday is the deadline to complete a deal.

Asia-Pacific Preview

The Chinese non-manufacturing PMI for January will be released at 0100 GMT. There is no consensus estimate but the prior was 56.0. At 0130 Chinese industrial profits for December are on the schedule. The prior was +24.4%. Comments from Merkels continued visit to China could also be market moving.