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14 Jun 2013
Flash: Bernanke tone to resonate dovishness? – Deutsche Bank
FXstreet.com (New York) - According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “It's likely the US market will increasingly think Bernanke will be relatively dovish in his upcoming remarks and this has started to resonate since yesterday.”
This got a late boost by the WSJ's Hilsenrath article that suggested that Bernanke will likely press the point next week that the Fed will not raise rates until well after the end of QE. It's a shift in tone from Hilsenrath's article in May where he wrote that the Fed had already mapped out a strategy for winding down asset purchases.
To be sure, yesterday's article contained little new information for markets and Hilsenrath was referring more to the Fed's commitment to keep rates low rather than making reference to its quantitative easing program. However, seeing the S&P500 and 10yr UST yields rally 7points and 5bp respectively in the minutes after the article hit newswires is probably a fair reflection of the market's day-to-day sensitivity to Fed tapering talk that has prevailed since May.
This got a late boost by the WSJ's Hilsenrath article that suggested that Bernanke will likely press the point next week that the Fed will not raise rates until well after the end of QE. It's a shift in tone from Hilsenrath's article in May where he wrote that the Fed had already mapped out a strategy for winding down asset purchases.
To be sure, yesterday's article contained little new information for markets and Hilsenrath was referring more to the Fed's commitment to keep rates low rather than making reference to its quantitative easing program. However, seeing the S&P500 and 10yr UST yields rally 7points and 5bp respectively in the minutes after the article hit newswires is probably a fair reflection of the market's day-to-day sensitivity to Fed tapering talk that has prevailed since May.