EUR/JPY is taking a pounding in afternoon trade, down over 125 pips since making a new multi-year high after Bernanke’s initial remarks in DC this morning.
Since noontime in New York we’ve come under selling pressure and now US equities are down on the day, shedding gains of about 1% early on. The market has the faint whiff of old-fashioned risk-off, when EUR/JPY would rise and fall in synch with the S&P 500.
- Fed can reduce rate of MBS purchases
He’s right. “A number” expressed willingness to taper in June. Probably George, Plosser and Lacker…
- Will be returning to London from France later today
Cable trades weak as the dollar stays firm versus the euro. We’re now at 1.5040, not far above 1.5021 session lows. 1.5000 barriers will likely be defended on further dips.
No taper, based on that headline…
- A number expressed willingness to taper as early as June (taper!)
- A number expressed inflation was below target (no taper!)
- A couple express concern more stimulus could be needed (anti-taper!)
- Most emphasized importance of being prepared to adjust purchases up or down (taper/taper not)
A truly mixed bag with every point of view represented. The majority seem to be with Bernanke and Dudley, wanting the flexibility to do more or less depending on how the economy develops.
Quick drop to 103.25 in USD/JPY from 103.73 earlier. EUR/USD up to 1.2875 area from important 1.2845 support.
Remember, the last statement gave the FOMC flexibility to taper or add to bond buys, so the upcoming minutes may not be as hawkish as the market thinks.
Ahead of the release of the minutes, 10-year notes yield 2.01%.
Machete attack in Southeast London. Live coverage here from BBC.
No longer sees Greek being expelled by the eurozone in 2014…