Daily monitor 26.02.2013 Tuesday

Market news:

Asian stock markets were broadly lower during late Asian trade on Tuesday, as appetite for riskier assets weakened after signs of an inconclusive general election in Italy.

U.S. stock markets suffered their worst daily loss since November on Monday as Italy’s election results began pointing to the above said results.

Italy's centre-left (Bersani) coalition won a majority in the lower house of parliament but the upper house is deadlocked, according to the Interior Ministry. Grillo said he expects a 6/7 month broad coalition between Berlusconi's centre-right and Bersani's centre-left parties, but has said he would not take part in any such coalition. As a results Italian bonds are under a severe selling pressure this morning.

Ben Bernanke’s semi-annual testimony on monetary policy to the Senate Banking Committee due later today (1500GMT) is expected to attract the market's attention.

The EUR has continued to lose ground against most of the major peers, and most European equities are also in the red this morning.

Intraday options that are due to expire today at 15:00 GMT.

EUR/USD – 1.3100

USD/JPY – 92.50, 93.50, 94.50

AUD/USD – 1.0220, 1.0300

Important economic data scheduled for today:

15:00 CB Consumer Confidence (US) – Previous: 58.6, forecast: 60.8.Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00 New Home Sales (US) – Previous: 369K, forecast: 381K. New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it's released ahead of Existing Home Sales because the reports are tightly correlated. Both datas will be released at the same time when Bernanke starts his speech which could be more important than the readings itself.