Markets surge following Bernanke address

15.12 AEST, Thursday 19 July 2012

Markets surge following Bernanke address

By Ben Taylor (Sales Trader, CMC Markets)

Our markets have surged from the open today on the back of Federal Reserve chairman’s second day address to the Senate Finance committee. Here Bernanke stated that the Fed had not fired all its bullets and that they stood ready to take additional action if higher levels of US employment eventuated.

While Bernanke’s address didn’t go as far as stating that QE3 is a definite reality traders are taking the statement as fact that additional stimulus will be forthcoming following the clear pullback in a net regional basis shown through the Fed's Beige book.

Energy stocks are the stand-out performers today on the back of strong production numbers from WPL and STO and a rise in the price of oil as fighting in Syria fans Middle East tensions.

The NAB business confidence survey today showed a negative reaction to the stability of the Eurozone outweighing the benefits of the two recent RBA rate cuts.

The Aussie:Euro trade continues to show wings on its march higher. Traders have reduced their bets of further Australian interest rate falls on the back of the RBA’s minutes. At the same time the German public has grown its support for Merkel’s bail out of Spanish banks and enforcement of stricter austerity for its troubled colleague's in the zone.

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