The testimonies of Ben Bernanke and Hank Paulson did little to embolden markets yesterday as fears over the long term economic implications of the bail-out package continue to swirl through Congress. Dollar remained shifty and was unable to take advantage of 2 pieces of negative data that would, in previous weeks, have seen the greenback strengthen markedly. Eurozone PMI for the manufacturing sector was a tad lighter than we expected and has allowed sterling to jump back into the 1.26s even after being marked down by comments from the MPC’s perennial dove David Blanchflower who said the BOE must cut rates ‘decisively and soon’.

Equity market futures were higher overnight as news was released that the ‘Sage of Omaha’ Warren Buffett has invested $5bln into Goldman Sachs. This is a great deal for both as Buffett is guaranteed a 10% dividend yearly and this influx of cash will help ‘the smartest bank on the street’ get through this latest bout of credit crisis.

It is once again a quiet day on the data front although we may see euro dip early in the day as the German IFO Business Climate reading is forecast to be lower.

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