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US building permits and housing starts came out below expectations. Building permits saw a drop from 0.99 to 0.91 million, falling short of expectations for a rise to a round 1 million. Housing starts fell from 0.91 to 0.84 million, a lot under a rise to 0.96 that was predicted. Housing has been an engine of the recovery, and weakness here is not really wanted.

The dollar is weaker. EUR/USD moved higher to 1.3180 before retreating to 1.3150, still above the pre-publication highs. USD/JPY is at 99.55.

At the same time, Bernanke’s prepared testimony for Congress was released. While the testimony contains a lot of information, not much is new. Basically tapering depends on the data. It could be tapered later in 2013 and halted in 2014, but “it is not on a preset course”.