By Rudi Filapek-Vandyck

US equities opened last night's session on a positive note, supported by ongoing optimism that Uncle Ben was once again going to save Wall Street's bacon, but this time it emerged Helicopter Ben wasn't yet ready to play ball. And so it was that what initially looked like another Big Rally event on Thursday quickly evaporated until there was nothing left by the sound of the session's closing bell.

The S&P500 closed 0.14pts lower at 1314.99 (essentially unchanged). The Nasdaq lost 13.70pts (0.48%) to close at 2831.02, but the Dow Industrials managed to hold on to a gain of 46.17pts to close at 12,460.96.

The general disappointment about Fed Chairman Ben Bernanke not promising more stimulus even overshadowed a surprise rate cut by the Chinese. Go figure! In his scheduled testimony before Congress, Big Ben declared the Fed was "as always" ready to act, but that was pretty much as far and as deep as he wanted to go, for now.

As a result, risk assets quickly reversed course with commodities and equities retreating from earlier gains. This despite China delivering a surprise rate cut - an event not seen since those heady days of GFC turmoil back in 2008. Initially the news was greeted with much enthusiasm, but disappointment about Bernanke's no strong commitment and questions about whether the Chinese move might imply Saturday's data may thus be weaker than expected eventually started to weigh on investor enthusiasm.

Following the Chinese 25bp cut the one year lending rate will fall to 6.31%, while the deposit rate will be 3.25%.

It's a difficult task to please the market these days. Just ask Bernanke, Draghi and the communists in Beijing.

On the agenda for this weekend are Chinese consumer inflation, industrial production, retail sales on Saturday, and trade data on Sunday. If the past can be our guide, there should be at least one negative surprise in these data (why else the rate cut?).

There was a lot of talk on the news wires about what can and will be Europe's next move to save Spain from bankruptcy. In the meantime, a well-timed move from rating agency Fitch saw the country downgraded to BBB from A. Gotta' love the old boys credit rating club.

In other news: the BoE left rates unchanged, Spain did manage to sell some 10-yr debt, US consumer credit rose less than expected, Switzerland's FX reserves shot higher to a record CHF303.8bn from CHF237.6bn as the Swiss central bank intervened to weaken the currency. US jobless claims fell by 12,000 to 377,000 last week, marking the first fall since late April. The four week moving average of new claims increased by 1,750 to 377,750.

US treasury prices rose (yields lower) for the first time in four sessions on Thursday. US 2yr yields fell by 1pt to 0.27% and US 10yr yields fell by 2pts to 1.65%.

The US dollar gained against the euro and commodity currencies. The Euro rose from lows around US$1.2545 to highs near US$1.2625 before closing US trade near US$1.2555. The Aussie dollar fell from highs near US99.95c to lows around US98.90c and ended US trade near its lows. And the Japanese yen fell from 79.20 yen per US dollar to JPY79.75 and ended US trade near JPY79.60.

Crude oil futures and gold swiftly reversed direction once it became clear that Bernanke wasn't going to put some extra TNT under risk asset prices. US Nymex crude fell by US20c, or 0.2% to US$84.82 a barrel. London Brent crude fell by US71c to US$99.93 a barrel. The August Comex gold futures price fell by US$46.20, or 2.8% to US$1,588.00 an ounce. Base metals prices in London enjoyed a good session on the Chinese announcement. Nickel was the standout with a rise of 3.1%.

On the local agenda today, we get trade data and a speech by RBA chief honcho Glenn Stevens. Housing finance is also released. Unless you still pay attention to what happens in Japan, there are no major releases on the international calendar today. Both Germany and the US release their own trade data.

Greg Peel will be back on Monday.

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