Markets Seemed Unfazed By Bernanke

 | Jul 18, 2013 06:09AM ET

Asian markets had a mixed day as the Shanghai lost ground. This comes as home prices, in China, came in higher than expected and investors brushed off U.S. Fed Chair Ben Bernanke’s testimony which stuck to the script. He confirmed there was no set timetable for winding down the U.S. stimulus program.

Bernanke testified in his semiannual congressional monetary report that the Fed will begin to taper back its bond buying back program later this year. However, this could change if unemployment rises or inflation remains below the target of 2 percent.

China reported today that home prices rose 6.8 percent. Economist expected a rise of 6 percent. This led to a sell off in developer and land reality companies on the Shanghai.

STOCKS

Today, the Nikkei was up setting an eight week high. The South Korean Kospi lost 0.6 percent while the Australian S&P/ASX was unchanged at 4,990. On mainland China, the Shanghai Composite has now hit a one week low.

European markets were quite happy with Bernanke’s testimony. The FTSE in London was up 0.2 percent, and both the DAX and CAC 40 closed up 0.6 percent yesterday.

U.S. markets were also higher yesterday as the DJIA rose 18.67 points and the S&P 500 eked out 4.65 points. The NASDAQ rose 11.50 to close out 3,610. Yahoo jumped 10 percent after the internet giant beat earnings expectations. However current quarter guidance fell short. Seven brokerages raised their target yesterday on Yahoo.

CURRENCIES

The EUR/USD is now trading around 1.3097 after failing to break above 1.3170 yesterday. We see strong support at 1.3075. Please see the below EUR/USD chart. The Euro could find support as yield spreads are narrowing. The 2 year spread is -0.21 percent and the 10 year spread is at -0.93 percent.