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Premarket: Traders gear up for possible volatile day Add to ...

U.S. and Canadian stock futures have been holding close to unchanged this morning,  but a full schedule of events today in both the U.S. and Canada are threatening to shake things up in a hurry.

Chief among them is Federal Reserve Chairman Ben Bernanke's testimony to Congress. His speech was already released this morning, in which he reinforced the message that the central bank's asset purchases "are by no means on a present course" and may be expanded or reduced based on economic readings, especially employment and inflation. But he also suggested that the Fed will moderate the pace of its asset purchases later this year and possibly end them in mid-2014.

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A question-and-answer session later today with Mr. Bernanke is likely to garner the most market scrutiny, as traders look for further hints on when the Fed's $85-billion (U.S.) a year bond-buying program will start winding down. Quite likely, he'll reinforce his dovish tone of last week and suggest that the timing of such moves isn't written in stone.

Central bank news on the other side of the pond sparked a mild selloff in European shares this morning. Minutes from the Bank of England's policy meeting showed all members - including newly installed Governor Mark Carney - voted in favour of keeping asset purchases unchanged. That was a change from earlier meetings, when about one-third of the nine members wanted to boost the stimulus measures. The voting results were released as some positive signs emerged about the nation's jobs picture, with the unemployment rate dropping to 7.8 per cent and jobless claims falling by the fastest rate in three years.

More earnings reports are coming out today from some of the largest U.S. corporations. It's still very early in the second-quarter earnings season, but so far results have been quite positive, with about 74 per cent of S&P 500 firms topping analysts' earnings estimates.

In Canada today, currency and credit markets are keenly waiting for what Stephen Poloz, the new head of the Bank of Canada, will say in the central bank's monetary policy report this morning and a later news conference.

There will be no change in the Bank of Canada's benchmark interest rate setting, but there's a chance that Mr. Poloz will deviate from the bank's recent commentary that the next move in interest rates will be up, not down.

Now, here's a closer look at what's going on and what's to come later today.

MARKETS:

Equities:

Futures: S&P 500 +0.25 per cent; Dow +0.08 per cent; Nasdaq +0.33 per cent; TSX Toronto +0.06 per cent

Hong Kong's Hang Seng +0.28 per cent

Shanghai composite index -1.00 per cent

Japan's Nikkei +0.11 per cent

London’s FTSE 100 +0.04 per cent

Germany’s DAX +0.26 per cent

France's CAC 40 +0.36 per cent

Commodities:

WTI crude oil (Nymex Sep) -0.1 per cent at $105.58 (U.S.) a barrel

Gold (Comex Aug) -0.1 per cent at $1,288.50 (U.S.) an ounce

Copper (Comex Sep) -1.2 per cent at $3.15 (U.S.) a pound

Currencies:

Canadian dollar at 96.40 (U.S.), versus 96.47 at Tuesday's North American close.

U.S. dollar index up 0.16 at 82.65

Bonds:

U.S. 10-year Treasury yield 2.55 per cent, up 0.005

ECONOMIC INDICATORS TO WATCH:

U.S. housing starts in June fell 9.9 per cent to an annualized rate of 836,000. That was far below the 951,000 reading economists had expected and highlighted the volatility in the monthly reading.

(10 a.m. ET) Bank of Canada announces its key overnight lending rate. Economists expect it to hold steady at 1 per cent for a 23rd straight meeting.

(2 p.m. ET) U.S. Fed releases the beige book, a reading on economic conditions that is used at FOMC meetings.

STOCKS TO WATCH:

Bank of America Corp. said it earned 32 cents per share in its second quarter, beating Street forecasts for 25 cents. Revenues of $22.9-billion also exceeded the Street forecast for $22.78-billion. Shares are up 0.7 per cent in the premarket.

Yahoo Inc. shares are up 0.3 per cent in the premarket after a mixed earnings report late Tuesday, which saw earnings exceeded Street forecasts but revenues falling short. It also provided a weaker-than-expected outlook for the third quarter.

Other earnings today include: Abbott Laboratories American Express Co.; Bank of New York Mellon Corp.; Delta Air Lines Inc.; eBay Inc.; Intel Corp.; International Business Machines Corp.; Kinder Morgan Inc.; Mattel Inc.; SanDisk Corp.; U.S. Bancorp

Canaccord Genuity cut its 12-month gold forecasts by 15 per cent to 20 per cent, and its silver forecasts by 20 per cent to 30 per cent, resulting in several rating downgrades in the precious metals stocks it covers. This includes Golden Star Resources, with a revised target of 20 cents from $1.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Speculative short positioning in gold is at its highest ever, according to a Merrill Lynch report. But there's why recent heavy gold shorting could lead to a rally.

The stocks now leading the market rally suggest there is a wider belief in a true economic recovery.

Some European stock markets are nearing their record highs.

Three signs to watch for that would suggest the market rally is about to end.

The Bitcoin ETF plan is struggling to find support.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.

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