On the heels of the Italian election result the EUR traded to short-term lows on Tuesday, but in early trading today appears to have found some resistance. The Single Currency has been weaker for about a week as investors grew nervous about the election in Italy. The outcome has provided little in the way of answers except politically correct talk about wanting to do the right thing for the nation and trying to form a coalition government among the ‘winners’ in order to avoid another election. The Sovereign Bond markets have not lost their complete footing as they maintain hope that the interest of Italy will come before political ambition.
Gold has climbed back from its lows and has traded higher the past two days. The precious metal stands near 1610.00 USD as of this writing. Crude Oil however has continued to test short-term lows. Wall Street turned in gains yesterday as the CB Consumer Confidence reading beat expectations, but the positive price action could also be interpreted as a value hunt by some who believed Monday’s sell off was too strong. Core Durable Goods Orders figures will be published today. And Fed Chairman Ben Bernanke will continue to testify in Washington D.C. today, this time in front of the House Financial Services Committee. Do not expect too many surprises from the testimony from Chairman Bernanke who is a veteran when it comes to speaking about the Monetary Policy Report.
Volatility has been a factor within forex in trading thus far this week and it is likely to continue, the JPY and GBP have both seen fast trading. Market conditions today will probably remain rather fragile as developing news has its effect on sentiment. Two stories that will certainly be in the spotlight are political hijinks from Italy, and from across the Atlantic the budget fight that is coming to a head again in Washington as Democrats and Republicans cast blame on each other and try to impress their constituents.