Unchanged on forward guidance, asset purchase left at $85. All as expected, risks to economic outlook as a whole. No real reference to the recent shutdown hoohah. In short it was more hawkish than the markets expected. Hence the bond/equity sell off and dollar appreciation.
Mr Hilsenrath has taken this to mean that a December taper can't be discounted.
This has left a more balanced look to the bonds medium term, I still see higher into the year end. Looking forward to some interesting data in November.
Overnight we have seen a small bounce off of the Eurex close so I anticpate the bunds to be around the low 50s on open.
TYA
Bunds just about keeping the the shorter term uptrend intact.
€ curve, momentum still with the downside but with Taper not off the table completly there is plenty of room for steepening to occur. I'm still a fan of fading steeps at least until we have ECB and non farm(and unemployment rate) next week.
€ ted All eyes are turning to Europe and their special measures as we approach the "liquidity cliff" and what/how the ECB use to maintain some confidence.
EU cpi's and retail sales to look out for this am as well as post FOMC activity.
Good luck
Lee
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