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AUSSIE BONDS

ACGB Nov '31 Supply Easily Absorbed

FED

Bullard Strikes Usual Hawkish Tone

RBA

Semi-Government Bond Purchase Offer Details

BOJ

BoJ Makes Rinban Purchase Offers

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The Fed met Citi's (hawkish vs markets) expectation of providing a warning that tapering may be announced at "coming meetings". However, the FOMC did not meet their expectation on producing details of potential pace and composition of the taper.

  • Powell's comment that there is still "ground to cover" on jobs "should refocus market attention on the two jobs reports between now and the mid-September meeting." Citi sees 1mn+ for July and a strong Aug.
  • Citi saw a hint "that the late-August Jackson Hole conference is a potential venue for giving more indications that tapering may be upcoming."
  • Future action: Taper announced in September, start in December, at $10B/month Tsys and $5B MBS.