Europe Europe’s markets opened sharply higher this morning on last night’s comments from Ben Bernanke that current levels of inflation and unemployment signalled that more stimulus would be needed in the coming months. This admission appears to have put the prospects of any tapering program on the back burner in the short term, and helped drive European equity markets to one month highs. The UK100 opened significantly higher this morning with the mining sector leading the gainers as the US dollar got sold off across the board and metals prices jumped sharply higher. The best performers have been Fresnillo, Randgold Resources and Rio Tinto as gold and copper prices jumped sharply higher to their best levels this month. Other gainers include Primark owner Associated British Foods after latest numbers showed that sales rose 8% in Q3 as its retail arm once again offset poor performance in its sugar division. On the downside outsourcing company Serco and G4S shares have been hammered on reports that the Serious Fraud Office is investigating allegations that both companies have overcharged UK taxpayers to the tune of tens of millions of pounds for electronic tagging services. US US markets opened higher today in the wake of Fed Chairman Bernanke’s pronouncements yesterday evening seemingly intent on retesting the all-time highs seen earlier this year, as markets appear to price out the likelihood of an imminent end to the current level of monthly stimulus. A rise in the number of weekly jobless claims to 360k from 343k have fed into this perception however it does need to be noted that last week’s number may have been distorted by the shortened holiday week around the 4th July holiday period. Stocks in the news include software giant Microsoft, as the company confirmed rumours that they were set to undergo a significant restructuring process, which will touch most areas of the business. KFC and Pizza Hut owner Yum Brands is also expected to be in focus after reporting slightly better than expected Q2 numbers after the close last night. FX After hitting two year highs earlier this week, the US dollar index has slid sharply in the last 24 hours, with the likelihood that we could well see further losses as the current unwind in US dollar long positions gathers momentum. Last nights unexpected dovish comments from Mr Bernanke appear to have caught traders unawares and we could well see further losses as markets re-evaluate the taper trade. The best performers have been the Swiss franc and the pound given that both these currencies have borne the brunt of recent under performance against the US dollar in recent days the resulting snapback has been much more pronounced. The euro has also bounced back from its recent lows despite attempts by ECB policymakers to talk it back down again, throughout the day. The Japanese yen has also gained after Japanese policymakers kept monetary policy unchanged saying that they saw no reason to change the pace of current stimulus due to early signs of a recovery in the economy. Commodities Gold prices have jumped sharply in the wake of last night’s comments from the Fed chairman as markets factor out the prospect of the start of an imminent tapering program. It is struggling to get back through the $1,300 level which had acted as a key support area on the way down. US crude prices which have been on a tear for over two weeks now slipped back sharply today from new 14 month highs, after weekly jobless claims jumped to a two month high of 360k. An IEA report which suggests that supply will outstrip demand over the next few years has also helped push the price back down. Speculation that Chinese authorities could well act to counteract the recent slowdown in their economy has helped pull copper prices off their recent lows, while Bernanke’s comments have also helped. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.