Asian markets this morning higher across the board, the Hang Seng the stand out performer up 1.5%, mainly on bets that the US Fed will introduce further stimulus following disappointing retail sales data today.

European and US equity futures are looking around 40bps, with Bernanke due to deliver his semi annual report on the economy and monetary policy before Congress as investors await further clues on whether we can expect QE3. US earnings come thick and fast today, with Goldman (EPS estimate of $1.18), Intel (52 cents) and Coca Cola ($1.19) the highlights.

In Europe, Moody’s have downgraded 10 Italian banks’ long term debt and deposit ratings, a move very much consistent with the sovereign downgrade last week.

In FX the Euro rallied following yesterday’s US data, and there was an initial follow through this morning to trade briefly above the 1.23 level, Bernanke’s report will be key for this pair, and any continuation of the recent risk on phase.

 

Posted by Philip Ball | Sales and Trading