Singapore firms must take heed of Bernanke's piece of advice

"Moderate pace of purchases".

According to Saxo Capital Markets, Bernanke emphasized at press conferences that while the decision to taper QE are on the way, “if the incoming data are broadly consistent with this forecast, the Committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year. 

Futures markets have brought their predicted date for rate rises closer – completely discounting the first 25bp hike by April 2015, and a much greater rise in rates thereafter.

Here's more from Saxo Capital Markets:

The statement altered the reference to "downside risks" by indicating that this risk has diminished "since the fall." Its rather dismissive reference to disinflation as "transitory" and its assertion that inflation expectations were "stable” displayed a pretty sanguine reaction to the recent falls in market measures of inflation expectations.

Nick Beecroft, Chairman of Saxo Capital Markets UK, suspect that this attitude to inflation and lower forecasts for the crucially important unemployment rate were the focus for the rates markets and their suspicions are that, if the Fed can lower its unemployment forecasts once, then why not again. 

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