The NY session was relatively choppy as the market continues to consolidate as traders await more news with regards to Fed Chairman Bernanke's confirmation and the FOMC meeting mid-week. Bernanke looks to have made up more ground with the ''yeas'' and the latest tally shows about 40 Senators backing the Chairman – compared with about 20 against him. One area of concern is that some have made Bernanke's confirmation conditional on the Fed leaving rates at extremely low levels. It is highly unlikely that Bernanke will stand for this sort of politicizing of the Fed and should this ''quid-pro-quo'' continue to be attempted, we would not be surprised to see him pull out of the nomination. Keep your eyes peeled for news on this front.

Economic data was pretty scarce but what we did see falls decidedly into the horrendous column. US existing home sales plunged -16.7% in the month of December after a 7.4% increase the prior month. The market had been anticipating a -9.8% drop as the expiry of the initial first-time homebuyer tax credit was widely expected to elicit a large reduction in sales. This decline surprised even the most bearish, however. The US dollar came under pressure on the much worse news and, in broad terms, the currency would shed another -0.2% into the NY close. The news also helped EUR/USD bounce off the 1.4130 zone, which has been flagged as critical sort-term support here.