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18 Sep 2013
Flash: High risk first Fed taper will be $20bn - RBS
FXstreet.com (Barcelona) - If the Fed delivers at minimum of 10bn taper today, in view of Greg Gibbs, FX Strategist at RBA, it will strengthen the case for a full taper to unfold over coming months/years.
Key Quotes
"A firm beginning to the taper should increase confidence that the Fed will go through with it by mid-2014."
"My base case it that the Fed kicks off with a 10bn taper, 5 each for Tsy and MBS; this firms up the full taper projection. Our economists are calling for a 20bn taper. But our Treasury trader pointed out that this is per quarter."
"There is a high risk that the taper number in the FOMC statement, the first to hit the screens, will be $20bn, in which case expect a significant USD bounce."
"Anything less that 10 bn, in my view is USD negative, especially with Yellen in the frame. This will raise doubts that the Fed is prepared to taper all the way. I see this as unlikely."
Key Quotes
"A firm beginning to the taper should increase confidence that the Fed will go through with it by mid-2014."
"My base case it that the Fed kicks off with a 10bn taper, 5 each for Tsy and MBS; this firms up the full taper projection. Our economists are calling for a 20bn taper. But our Treasury trader pointed out that this is per quarter."
"There is a high risk that the taper number in the FOMC statement, the first to hit the screens, will be $20bn, in which case expect a significant USD bounce."
"Anything less that 10 bn, in my view is USD negative, especially with Yellen in the frame. This will raise doubts that the Fed is prepared to taper all the way. I see this as unlikely."