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The Ben Bernanke Factor

Posted by WorldWideMarkets . on May 22, 2013 3:31:00 AM

Once investors digest The Ben Bernankethe BOJ, the focus is clearly on the Fed Chairman Ben Bernanke’s testimony to Congress at 10 am EDT (1400 GMT). While any indication that QE will end will keep the dollar rally on track, any hint that QE has no end in sight is likely to encourage a dollar sell off given the expectations that have been built in. But given Bernanke is unlikely to directly telegraph a date for the end of QE even when that appears ahead, watch for any words on jobs. The Fed has already signaled that U.S. jobs growth is key to the decision to end QE and clearly while there are more jobs, there are nowhere near enough jobs for the Fed. Any reaction in currency markets will spill over to other asset classes even indirectly. Metals are a case in point. Gold has declined on dollar strength and inversely any dollar weakness is likely to push up the yellow metal. Fed minutes later in the day from the April 30-May 1 policy meeting may have a slight impact but given they are old and Bernanke has already spoken directly to Congress and the world financial community, expect most of the action in the morning.



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