GLOBAL MARKETS-Dlr steady before Bernanke, shares recover from Bank of England surprise
* European shares rebound after by BoE minutes shock, BoA earnings
* Bernanke's testimony starts at 1400 GMT, prepared remarks at 1230 GMT
* Dollar steady after coming off three-week low
* Commodity markets in holding pattern ahead of Fed
LONDON, July 17 (Reuters) - The dollar steadied after climbing off a three-week low and stock and commodity markets moved into a holding pattern on Wednesday, as investors awaited fresh clues on the U.S. Federal Reserve's stimulus withdrawal plans. Focus was squarely on Fed chief Ben Bernanke's testimony to U.S. Congress, with prepared remarks due at 1230 GMT expected to be aimed at calming concerns about the central bank's $85-billion-a-month bond-buying programme - while reminding markets that the ultra-easy policy cannot last forever.
Stock futures pointed to Wall Street opening virtually unchanged but with Bernanke's comments set to come out before the U.S. restart it was difficult to predict moves. Ahead of Bernanke, European shares had recovered from the surprise news that there were no calls for new UK stimulus at Mark Carney's first meeting in charge at the Bank of England. Carney and the bank's other eight policymakers voted unanimously against more bond purchases, setting aside their differences ahead of a soon-to-be-released review on giving guidance about future interest rates. The broad FTSEurofirst 300 was up 0.5 percent at 1200 GMT having been down by the same amount earlier, though lower German Bunds and UK Gilts kept Europe's bond markets on the back foot and sterling remained under pressure. "It's quite a surprise that nobody voted for more (BoE stimulus)," said Deutsche Bank economist George Buckley, referring to quantitative easing bond buying. "Now the question is, if they don't do anything on forward guidance, do they then go back to reverting to QE? I suspect not because the data has shown signs of recovering." The dollar was steady having climbed off a three-week low overnight, though investors were wary of being long the dollar, after Bernanke last week caused a shakeout of positions with comments that were considered unexpectedly dovish. "The market was quite long of dollars then it got that shock," said John Hardy, head of FX at Saxo Bank. "A very dovish outcome from the testimony could see some short-term dollar weakness but it could turn around pretty quickly, so we'll see."
BIG BEN Bond markets have been the main transmitter of volatility since the Fed started outlining its withdrawal strategy. Yields on 10-year U.S. government debt hit a two-year high on July 8 after the Fed laid a rough timetable for the plans, spooking investors worldwide, but have since eased more than 20 basis points and were last at 2.55 percent. European bonds - not just those in the UK - had reacted badly to the BoE meeting minutes with benchmark German Bunds tracking a slide in Gilts to a session low. "Investors are a little bit reluctant to buy or to take positions in general ahead of the speech of Bernanke this afternoon, especially (because) everybody knows that his latest two speeches led to a massive spike in volatility and you can't really predict which way it's going to go," Christian Lenk, strategist at DZ Bank said. The S&P 500 snapped an eight-day winning streak on Tuesday after disappointing earnings from Coca-Cola. The pace of corporate earnings continues to pick up later, with reports expected from American Express Co AXP.N, eBay Inc EBAY.O, IBM IBM.N and Intel Corp INTC.O. In the commodity markets, gold dipped 0.1 percent, after gaining 0.8 percent on Tuesday, while copper prices fell 0.5 percent to below $7,000 a tonne, giving up some of the previous session's 1.2 percent gain. Brent crude prices fell 0.3 percent to below $108 a barrel, retreating from a 3-1/2 month high hit on Tuesday. "Traders would be very cautious in taking fresh positions given that they have been burnt on both sides, on the dovish side as well as the hawkish side," said Ben Le Brun, an analyst at OptionsXpress in Sydney, speaking of the U.S. Federal Reserve's stimulus programme.