There was little clear direction in sentiment last night with no important economic data releases.
Markets appeared to be waiting for confirmation from Fed Chairman Bernanke on whether the Fed will look to taper its asset purchase program after growing talk over the past week.
US share markets were down slightly - the Dow, S&P500 and Nasdaq indices fell 0.1%.
US treasuries were little changed, although 10-year yields were close to two-year highs on talk of the Fed's asset purchase program tapering off.
Investors are awaiting Bernanke's testimony to congress or the Fed minutes tomorrow for further news.
The US dollar fell against most currencies, pausing after its recent surge over the past few days. A warning of a potential downgrade from Moody's may have placed some downward pressure on the US dollar.
It said more needed to be done to address the rising debt ratio. The yen strengthened following comments from Japan's economic minister who said that the yen's excessive strength had largely corrected. The Australian dollar rose back to above 0.98 suggesting that the AUD had been oversold.
Commodity prices were higher, supported by a weaker US dollar. Copper prices rose to its highest in a week, while gold prices rebounded.
There were no data releases yesterday.
Chicago Fed president Evans added to the quantitative easing debate, raising the prospect of ending its bond purchase program abruptly in autumn if there was enough certainty that the labour market was improving.
Focus will turn on the Fed Reserve President Bernanke who will speak tomorrow night for clues on the future of the Fed's bond purchases.
The Chicago Fed national activity index fell from -0.23 to -0.53 in April, providing some further evidence of headwinds in the US economy.
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