No Promises From Bernanke

Chairman Bernanke didnt offer any clear signals about what the Fed will do when Operation Twist expires at year end, leaving the market disappointed. The pound was the days best performer while NZD and AUD lagged. Eurozone ministers continue a meeting in Brussels on Greece. A new Premium Insights edition will be released in 2 hrs from now.

The market was expecting a hint at what Bernanke would do to replace the long-term Treasury buying from Operation Twist but he was mum in his speech. He spoke about the potential economic consequences of the fiscal cliff and said unemployment was 2-2.5 percentage points above potential.

The employment comment was slightly dovish but the stock market slipped afterwards. The forex was relatively involatile throughout US trading with the euro stuck in a 1.2784-1.2810 range.

USD/JPY strengthened to a marginal fresh 7-month high at 81.76 as LDP leader Abe continued to pledge more extreme monetary policy if he wins the election.

Housing remains the bright spot in the US economy as starts jumped to their highest since 2008. The pace of 894K was much higher than 840K expected.

The focus remains on Eurozone meetings as officials try to hammer out a sustainable deal for Greece. Midday headlines suggested interest on official loans to Greece could be cut to 0.25%.

The calendar highlights include the Australian Sept leading index at 2330 GMT and Japanese October trade data 20 minutes later. At 0500 GMT, Japan will publish its November economic report.

-AB