9 Dec 2013
Flash: The case for tapering - BAML
FXstreet.com (London) - Strategists at Bank of America Merrill Lynch said the November payroll report gave a green signal to the Fed to begin tapering.
Key Quotes:
“While we can argue about the exact timing of the start of tapering, there is no denying that the economy has momentum heading into 2014”.
“The three-month moving average of monthly payroll gains has risen from 146k in July to 193k currently. Further, downside risks have subsided significantly. There is some talk of the bipartisan budget committee reaching a two-year deal, which should reduce the possibility of another government shutdown next year”.
“And finally, the front end has been much better behaved during the recent rise in rates. Even though 10s are close to the highs in rates reached over the summer, the timing of the first rate hike is a year later”.
Key Quotes:
“While we can argue about the exact timing of the start of tapering, there is no denying that the economy has momentum heading into 2014”.
“The three-month moving average of monthly payroll gains has risen from 146k in July to 193k currently. Further, downside risks have subsided significantly. There is some talk of the bipartisan budget committee reaching a two-year deal, which should reduce the possibility of another government shutdown next year”.
“And finally, the front end has been much better behaved during the recent rise in rates. Even though 10s are close to the highs in rates reached over the summer, the timing of the first rate hike is a year later”.