Markets In Consolidation Ahead Of Weekend

The markets are rather quiet in consolidative mode ahead of the weekend. The Dow's rebound lost momentum well ahead of the 16588.25 historical high and closed down -64.93 pts at 16417.01. It will like stay in recent range for the rest of the week. The dollar index struggling around 81 level for the moment. 10 year yield took a beating and closed down at 2.843% but was held above recent low of 2.819%. The point to watch today is whether yield would tumble again and drag down yen crosses. Otherwise, the forex markets are generally staying in range trading too.

Bernanke had possibly his last public speech as Fed chairman yesterday. He downplayed the costs of the massive asset purchase program adopted and noted "some of the costs people talk about are not really costs." And the only real risk of the bond buying is asset bubbles. But Bernanke emphasized that stocks and other financial markets "seem to be within historical ranges". Janet Yellen, the current vice chairman, will take the post of Fed chair on February 1 as Bernanke steps down at the end of this month.

In Eurozone, ECB executive board member Coeure said with the benchmark interest rate at 0.25%, "there is room to cut it if needed". And he noted that is "with our forward guidance that rates will remain at their current level or lower. He added that "if we have a strong sense that anything impacts the medium-term scenario and moves our medium-term inflation expectation further away from 2 percent, then there would have to be a monetary policy reaction." Meanwhile,, the European Parliament approved the nomination of Germany's Sabine Lautenschlaeger to executive board of the ECB.

On the data front, Japan consumer confidence, Swiss PPI, UK retail sales will be released today. Meanwhile, US will release new residential construction, industrial production and U of Michigan consumer sentiment.