Yesterday we pointed out that the yield curve was taking over as the chief story in the US markets, and today will likely confirm that.First we had the comments from BoE chief Mervyn King regarding quantitative easing — comments that provided a nice mirror to our situation (where we seem to be doing the opposite).
Then Bernanke testifies in front of Congress today tomorrow. His testimony is always closely watched, but this one will be watched even more than normal given the recent move on the discount rate. Watch for trigger-happy traders to sell every time he utters the word “exit,” even if it’s in the context of there not being an exit planned anytime soon.
And we have a major Treasury auction on tap today. This time it’s a $44-billion auction of two-year notes.
What else should you watch?
Toyota will again be on the spotlight on Capitol Hill, and Case-Shiller housing numbers for December come out at 9.