IIFT Daily Note with Peter Brown

Ben Bernanke today.QE ending? I doubt it.

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3.00pm is the big event today. The US have been pouring 85 bln Us dollars into their system every month. We know what it has done and a lot of commentators credit it with the recovery in the US economy. Is it about to be tapered off? I don’t think the timing is right or the economy is strong enough yet. Remember he said he would continue with QE until the unemployment rate reaches 6.5%, we are not there yet. However the market will be focused on what he says and any hint of policy going forward.

Expect a pretty quiet session ahead of 3pm.

Yesterday we reached another high on the S&P, same old same old. Dependending on Ben we may get a small pull back or a surge. Any tapering of QE will cause some small selling but remember if the Fed Chairman is willing to unwind support for the market it is because he feels the market is strong. This is good for stocks so any sell off well be short lived.

Levels today are: S&P 1675  1660  Euro 1.2940  1.2840

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