Thursday 21st November 2013 Tapering on, tapering off……the guessing game continues. Last week it was Janet Yellen’s testimony to the US Congress that led observers to believe tapering was off until, say, March. Yesterday it was the minutes of the October Fed meeting that led to a suspicion that tapering could happen next month. What is coming across quite clearly is that when tapering does happen, bond yields are likely to rise and the dollar to strengthen against the euro etc. Last night the US 10-year bond yield jumped up to 2.8%, now closer to its 3% high in 2013. The dollar gained 1% to $1.342 versus the euro etc and in this case the US stock market reversed a 0.4% gain to end down 0.4%. Retail sales were strong in the US, but consumer inflation year-on-year is a mere 1%. European shares closed flat yesterday and this morning Asian shares are mixed, with the Nikkei at a 6 month high, up 1.6% at 15,320 (yen over 100 to the dollar), while most other markets are down, with the Hang Seng in Hong Kong down 0.5% and Aussie down 0.4%. The HSBC early PMI indicator of Chinese manufacturing showed a down-tick from last month to 50.4. Even though it is the 2nd highest reading in the past 6 months, it was lower than expected. The JSE ALSI recouped losses yesterday to close up 0.14% at 45,201. The SA CPI inflation came out at 5.5%, better than expected, which helped bond yields drop to 8.1%, although the tapering news has them back at 8.19% this morning for the 13-year R186 bond. The rand is at 10.17 to the dollar (closed at 10.06 yesterday), 16.33 to the pound and 13.66 to the euro.
Posted on: Thu, 21 Nov 2013 08:31:12 +0000
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