3 Feb 2014
Flash: US: Taper conclusion to remain on course - ING
FXStreet (Barcelona) - James Knightly, ING Bank Economist notes that this week’s data, starting with today’s ISM manufacturing report, will highlight the relative strength of the US economy and the prospect of ongoing Fed tapering.
Key Quotes
“Last week’s decision to lower the Federal Reserve QE programme to US$65bn of asset purchases a month was vindicated by the strong 4Q13 GDP report and is likely to get further backing from this week’s data.”
“Unfortunately, this may mean more unnerving times for emerging markets as the gradual process of policy normalisation continues. Today’s ISM manufacturing report is expected to hold at December’s level of 57.0 given what we have seen from the regional indicators.”
“These have included a big rise in the Empire manufacturing surveys with smaller moves in the Philly Fed and Kansas Fed surveys. However, the Dallas, Chicago, Milwaukee and Richmond surveys were either flat or very modestly lower. A reading of 57.0 would be historically consistent with GDP growth of around 4% YoY and so would boost expectations of ongoing job gains and the Fed tapering probably being concluded by 4Q14.”
Key Quotes
“Last week’s decision to lower the Federal Reserve QE programme to US$65bn of asset purchases a month was vindicated by the strong 4Q13 GDP report and is likely to get further backing from this week’s data.”
“Unfortunately, this may mean more unnerving times for emerging markets as the gradual process of policy normalisation continues. Today’s ISM manufacturing report is expected to hold at December’s level of 57.0 given what we have seen from the regional indicators.”
“These have included a big rise in the Empire manufacturing surveys with smaller moves in the Philly Fed and Kansas Fed surveys. However, the Dallas, Chicago, Milwaukee and Richmond surveys were either flat or very modestly lower. A reading of 57.0 would be historically consistent with GDP growth of around 4% YoY and so would boost expectations of ongoing job gains and the Fed tapering probably being concluded by 4Q14.”