- Fed Chairman Bernanke echoed Kohn's dovish comments made earlier this week, saying that the Fed outlook has been importantly affected by the new market turbulence. "We at the Fed will have to remain exceptionally alert and flexible," Bernanke said. He said that the housing slump and rising energy prices probably will create some "headwinds for the consumer in the months ahead." Considering that we have now seen the two top people at the Fed reading the same script, analysts agree that an interest rate cut at the Dec 11 meeting now seems all but inevitable.

- Market reaction to Bernanke's commentary (from 18:45 ET, when he spoke, to 22:00 ET): S&P futures rallied from 1469 to 1482. Asian stocks reacted positively to his comments - Nikkei +1.19%, ASX +1.02%, KOSPI +1.55%. USD/JPY moved from 109.68 to 110.31, EUR/JPY moved from 161.89 to 162.77. The renewed appetite for risk lifted the AUD and NZD - AUD/USD moved from 0.8831 to 0.8874. Spot gold rallied from 800.92/oz to 806.25/oz. Traders initially sold the USD against the European currencies, but the USD managed to retrace most of its losses at the time of writing this.

- Japan's October core CPI posts 1st rise in 10 months: (JP OCT NATIONAL CPI YOY: 0.3% V 0.1% expected, -0.2% prior; CORE: 0.1% V 0.0% expected, -0.1% prior) Analysts were quick to downplay the significance of today's firmer inflation figures, with most of the upside driven by higher oil prices. The data does not change the outlook for Japanese rates, with the central bank expected to remain on hold until credit markets calm down.

- Data shows Australian economy remains robust: (AU Q3 CURRENT ACCOUNT BALANCE: -15.6B V -16.4B expected; Prior revised to -15.62B from -16B) The data showed notable improvement in Australian exports, meaning that there's some upside risk to next week's Q3 GDP data.

- Equities: Most Asian stock markets are trading higher after Fed Chairman Bernanke hinted that he is leaning towards a rate cut at the December 11 meeting. The renewed risk appetite weakened the JPY and boosted commodity prices, lifting Japanese exporters and Aussie resource stocks. Chinese equities saw heavy selling after the Shanghai Composite dipped below the 5,000 mark, while a rebound in financials lifted the Hang Seng index.

- Commodities: Crude oil is little changed and is trading around $91/bbl. Spot gold gained +0.10% between 18:00 ET and 23:10 ET, trading at $803.10/oz. Shanghai copper is higher on gains in equities and on speculation that weekly Shanghai Futures Exchange copper stockpiles declined for the second consecutive week.

(by Eben Esterhuizen and Gavin Pierce)