Poll

When will the FED begin 'tapering' ?

December 2013
1 (12.5%)
January 2014
2 (25%)
March 2014
1 (12.5%)
Before July 2014
1 (12.5%)
In 2015
3 (37.5%)

Total Members Voted: 8

Author Topic: FED tapering ?  (Read 7067 times)

Moonraker

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FED tapering ?
« on: November 21, 2013, 01:48:42 pm »
The broader European trading mood was also subdued on the outlook for less quantitative easing in the U.S. Minutes from the Federal Reserve's October meeting published late Wednesday showed the central bank could decide to taper its $ 85-billion-a-month asset purchases at one of its next meetings if the economy continues to improve.

Currently odds are:-

25% in December meeting
25% in January 2014
50% in March 2014

Moneypenny

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Re: FED tapering ?
« Reply #1 on: November 21, 2013, 02:29:30 pm »
Mid Feb, so I'll vote March.

Moneypenny

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Re: FED tapering ?
« Reply #2 on: November 22, 2013, 02:15:46 pm »
Interesting, most users so far think it will be 2015?

Moonraker

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Re: FED tapering ?
« Reply #3 on: November 22, 2013, 02:37:05 pm »
All hinges on the FED tapering. Good news in US is bad news for emerging markets as it will give impetus to tapering earlier.
I voted Jan. 2014 and think the most likely start to tapering will occur either in Jan. or in March 2014.
We are already seeing this nervousness affecting or market and other (mainly) emerging markets.

Goldman’s top 10 themes for 2014


• ….but EM differentiation to continue

Countries with high current account deficits, high inflation and weak institutions were punished more heavily than those with stronger current accounts in 2013′s sell off in emerging markets, and the level of differentiation is likely to be even greater in 2014. Goldman Sachs expects a greater separation between countries with credible tightening policies, such as Brazil and India, and those where imbalances are allowed to grow, such as Turkey.

The note said: “There is also likely to be increased focus on the small number of countries showing more classic EM-style problems. The macro environment in Venezuela is deteriorating rapidly and we expect a large devaluation and further credit pressure. Argentina’s macro backdrop is also unfriendly. And we continue to think that Ukraine will choose to devalue and seek external support in the coming months.”

• Commodity downside risks grow

Goldman Sachs expects 15% plus declines in prices in gold, copper, iron ore and soybeans. Energy prices, while more stable, also face downside risk which is growing over time.

The note said: “These pressures are also likely to reinforce some of the other core themes discussed here – loosening what has been a key constraint on DM and global growth in recent years, keeping inflation subdued and preventing long rates from rising much above forwards.”

Delusionsofgrandeur

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Re: FED tapering ?
« Reply #4 on: November 26, 2013, 06:56:22 am »
Is it better to stay in cash or use a fixed deposit than invest on the JSE at the moment,if so for how long?
« Last Edit: November 26, 2013, 07:05:12 am by Delusionsofgrandeur »

Moonraker

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Re: FED tapering ?
« Reply #5 on: November 26, 2013, 09:37:55 am »
Is it better to stay in cash or use a fixed deposit than invest on the JSE at the moment,if so for how long?
Nobody will be able to advise on that, least of all moi. The knock-on effects to EM's may be somewhat ameliorated if the
FED reduces the $85 billion monthly purchase of Treasury bonds and mortgage backed securities in a subdued, gradual
manner, and at the same time ensures that interest rates don't get raised, or are only marginally raised, until such time as there is
real strength in the economy with inflationary pressures becoming hard to ignore - i.e. over 2% p.a.
That could take a while.
Regarding our market, I don't think we will see any growth in 2014 at all. Stock picking will be important.
But, truth be told, I am unable to answer your question.

PS. Please vote if you haven't already done so.