Bernanke likely to hint at taper dates

I’m definitely not an expert on Fed-speak but some buddies in the bond market follow Ben’s every word religiously and they expect to hear some definite hints on when the tapering is likely to start. Early next year is best guess. What will that mean for the FX market?I think we will see some impatient USD longs getting squeezed but any falls should be limited.

Edit: The speech will be released 90 minutes before Mr Bernanke starts his Q&A in congress so we could see big swings as interpretations may differ from the tone of his answers. Best way to trade it is to have no positions and wait for wild swings.

  1. Hi Sean, I’m short EUR/JPY again. How do you see this one being impacted by dovish/hawkish statements from Big Ben. I might have been better just playing it directly through USD/JPY this time but I’ll see how it pans out. Cheers, Peter.

  2. Hi Peter. Pretty straightforward trade this one imho, just keep stop above 13140. Mkt is looking for angles but Ben has been pretty direct if only folks would listen. So positioning still major driver and mkt is long I think

  3. His comments last week still has reference to exit mid 2014 but still no definite date on when exit wud start? We may get definite dates today I believe

  4. He did say that…and the Q is whether the timing will be Sep or Dec. If BB clearly indicates Dec, then will play out as Sean said.

    If mkt thinks Sep, then mkt will prob resume the long USD & short JPY play in a strong way…although vs AUD, I’m not so sure anymore.

    If BB gives a confusing signal, then mkt will prob unwind USD longs and continue to be hyper neurotic around data events…prob not what the Feds want.

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