European session is trading in a thin volume as global markets await Bernanke’s statement which is due at 14:00GMT. In his last speech Mr Bernanke took a U turn on his more aggressive tone and said that the Central Bank is still not sure if the unemployment rate is at their desired level. His comments brought an appetite for riskier assets back in the markets and the US indices are back in a record high territory once again and recorded the longest consecutive eight day rally on Monday since January.
However, an important thing to see in his speech today would be if he gives a clear and transparent sign for the market in relation to the QE tapering and most importantly if the Central Bank does initiate the QE tapering this year, will they increase the bench mark interest rate from their ultra-low levels. Global markets are getting used to an idea of tapering however; an increase in the interest rate could seriously harm
the housing recovery in the US.
It is also important for Mr Bernanke being more clear and defined about the QE tapering idea later on today because further confusion could increase the volatility in the market and could trigger a bigger selloff in the markets