Fed has gone "all in," says RBC Capital Markets senior
FX strategist David Watt; "while the FOMC left rates unchanged at de minimis
levels, they decided there was no time like the present to announce plans to
buy U.S. Treasurys, $300 billion over the next six months to be exact, focused
primarily on the two-to-ten-year part of the curve. That amounts to $50 billion
a month, but the values are not as important as the symbolism, and those values
are likely just the opening gambit." Adds "the Fed is not going to sit on its
hands; it is going to remain proactive. U.S. equities fell in love with Ben
Bernanke all over again, while the dollar was taken to the woodshed and beaten
like a dog. And after a short rest, beaten like a dog again. Market sentiment
on the Fed's maneuver was crystal clear."(RXM)
FX strategist David Watt; "while the FOMC left rates unchanged at de minimis
levels, they decided there was no time like the present to announce plans to
buy U.S. Treasurys, $300 billion over the next six months to be exact, focused
primarily on the two-to-ten-year part of the curve. That amounts to $50 billion
a month, but the values are not as important as the symbolism, and those values
are likely just the opening gambit." Adds "the Fed is not going to sit on its
hands; it is going to remain proactive. U.S. equities fell in love with Ben
Bernanke all over again, while the dollar was taken to the woodshed and beaten
like a dog. And after a short rest, beaten like a dog again. Market sentiment
on the Fed's maneuver was crystal clear."(RXM)
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