For the eurozone to survive then the Italians, one of the founding members of the whole European project back in 1957, really need to get a grip of their finances. 

As with many of these things the problem is the lack of political will especially when an election is around the corner.  It's clear that the majority of Italian voters want to see the back of Berlusconi, but like many of the Middle Eastern dictators, he is reluctant to go and even more reluctant to make himself more unpopular than he already is by pushing through austerity packages.

As a result the markets are getting twitchy but at least an Italian bond auction got away well yesterday and prevented the markets from completely melting down.  Early on in the session it did look like we were staring a complete crash in the face but investors just about managed some late rational thinking to compose themselves and pull us back from the lows.

Already this morning we've seen a raft of Chinese data with industrial production GDP and retail sales.  These seem to have provided a sigh of relief for Asian markets that had expected the GDP data to come in a bit lower towards the 9.0% level but it has held up well coming in at 9.5% for Q2.  There's no question that China is slowing, but even with all the tightening it's still growing at a substantial pace, driving global GDP and today's figure goes some way to calm any concerns that its tightening cycle is causing their economy to cool too quickly.

This morning the FTSE is taking a leaf out of yesterday's rational thinking and finally it looks like we may have found some support after a terrible last few days.  This is mainly down to the decent bounce by Asian markets as we were calling the FTSE some 20 points lower overnight.  Support levels are seen around 5840 and then 5795/65/30 and resistance is at 5940/70.

There UK unemployment data out this morning which so far this year has really managed to surprise to the upside considering the gloomy outlook for the overall UK economy.  On the whole the employment picture is good all things considered and however today's number could show the first signs of the labour market starting to struggle.  Claims are due to rise along with the rate of unemployment as recent survey data does indicate hiring intentions slowing.

Later on today Federal Reserve chairman Ben Bernanke gives his testimony to Congress and this could provide some volatility later on today (as if we needed anymore!), but since he now gives press conference after each FOMC meeting the impact might be more muted.  There isn't expected to be any shift in his outlook for the economy, the Fed's accommodative policy and the elephant in the room QE3, is not expected to be mentioned.

The euro was once again the whipping boy as EUR/USD plunged back below the 1.4000 mark but the recovery in risk assets allowed the pair to get back above the figure.  This morning it's been above and below there and is at 1.4015 at the time of writing.  Traders will be closely watching the support at 1.3840 which are yesterday's lows and where the bulls showed they at least have a little bit of life left in them.  A break below here will open up 1.3800 and then the next major support is seen at 1.3400.  To the upside 1.4185 may seem a ling way off but this is the near term resistance target the bulls want to see overcome.

The euro's woes allowed sterling to spike against the single currency taking GBP/EUR back above 1.1400 but only temporarily.  The gains by sterling were reversed quickly after the softer CPI data and since the recent strength has been more due to severe weakness in the euro, the sentiment towards sterling is still rather bearish overall.  This morning GBP/EUR is at 1.1380.

Gold continues to benefit during these times of turmoil for financial markets and is within sight of its all time high again.  Few would bet against it breaching this level and certainly clients remain long the yellow metal.  At the same time its cousin silver still can't seem to get back above $37 but of the bulls of silver they'll be encouraged to have seen a strong bounce off the 35 level.