The Day Today 21 May 2014

* Fed’s Dudley gave a key speech on what actually will happen when the exit begins, covering in detail more about the reverse report market the Fed could use to withdraw liquidity. http://on.ft.com/R7K3a9 http://nyfed.org/1knYbHQ
They told us tapering wasn’t tightening, now they’re telling us that exit doesn’t mean the start of lots of rate hikes… when are we going to hear that they WANT to be behind the curve?
The warnings about volatility are coming thick and fast now:
– BOE’s Bean: may be ‘a few potholes’ on way to exiting stimulus, MARKET RISK PERCEPTIONS WILL REVERT TO MORE NORMAL; CURRENT SEARCH FOR YIELD REMINISCENT OF PRE-CRISIS http://bit.ly/1odX523 Telegraph: http://bit.ly/1mWC4te
– Fed’s Plosser: –Consequences of Being Late on Tightening ‘Might Be Different, More Dramatic’, Policymakers’ Natural Tendency To Be Certain, Risk Getting Behind Curve { FIFW NSN N5VW376TTDSQ<GO>}
* Will tonight’s FOMC Minutes elaborate further on what their exit plan might look like? U.S. Two-Year Yield Trading Near Lowest Level Since March Before Minutes {fifw NSN N5WUHO6S972L <go>} – that’s below where they were when Yellen said rates could go up in middle 2015.
* BOE and the Govt in relatively cosy agreement over potential housing bubble it would seem… Cameron Says U.K. Open to Lowering Help-to-Buy Cap If BOE Urges {fifw NSN N5V7N56TTDS5 <go>}

* The Yen bears will have to wait a bit longer for any new easing from the BOJ: BOJ Refrains From Easing on Signs Japan Is Weathering Sales-Tax Increase {fifw NSN N5WRLP6S972E <go>}

* CS guilty plea left them relatively unscathed thus far, but BNP Paribas could now face a tougher punishment, ‘a temporary ban on transferring money into and out of the US floated by New York’s Superintendent of Financial Services’ in addition to $5bn of fines {fifw NSN N5WFPK6K50XX <go>}
* Iceland feels it’s now strong enough to listen to the demands of its creditors, 6 years later {fifw NSN N5WVAH6S9729 <go>}

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