The
markets are convinced that Bernanke will advise on Wednesday afternoon in the
US that the US Fed has decided to maintain its current asset purchase program
(stimulus) and therefore this is the reason why the Dow Jones closed up over
100 points on Tuesday. Traders don't want to miss the rally that might take
place when Bernanke says its all go for the continuation of the money printing.
What
chances are there of him saying something to contradict this? Very little
really, he might remind the market that if the data improves there is no reason
why the US Fed won't begin the taper but the market already knows this and with
Retail Sales figures overnight coming in just under market estimates and US
Consumer Confidence data taking a big tumble the market is positioned for a
Dovish speech which will most likely see the bulls continue to run and could
send the US Dollar lower and Aussie and Kiwi Dollars higher. Of course if he
surprises the markets with a more hawkish speech and hints he may leave a
legacy of being the Chairman to start the taper in December or January the
opposite will happen.
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