MarketPulse | Jan 09, 2014 07:06AM ET
Market prices remains relatively contained despite this weeks scheduled event risk releases. Investors have yet to find firm footing in the second week of the New Year. However, this mornings show and tell from various Central Banks could gives us grounds for fresh market movement, if not, then it will be up to tomorrows highly anticipated non-farm payrolls release to give us further insight into how deep and wide the market can expect the Fed's taper to be. Yesterday's FOMC minutes revealed that members saw "declining benefits" from monthly bond purchases and many of the voters favored QE tapering in 'measured steps.'
Will the previously united stimulus front get a makeover in 2014? Follow the leader is not a “perquisite” for policy makers anymore. With rate divergence expected to dominate the trading theme in 2014 everything that the ECB or the BoE says and does will come under extra scrutiny. Will the "big" boys come out to play later this morning? No one expects the ECB or BoE monetary policy meeting to deliver any changes in their policy stance this month. Despite both Central Banks remaining price conscious, a theme of higher rates, mainly forced by the pull of US treasuries, could potential threaten global expansion is not something to taken lightly so early in the campaign. No policy maker will be willing to thrown caution to the wind just yet. In this current lower rate environment the Euro-zones peripheral states are taking full advantage of declining yields to issue debt ("demand to match appetite") - Ireland, Portugal, Slovakia and Spain have all stepped up this week.
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