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Asia World Capital Group: The Federal Reserve has shocked global markets after deciding not to begin tapering its QE3 program. Asia World Capital Group: After months of conjecture on the subject of how much the US Federal Reserve would being scaling back the scale of its bond-buying program, investors were shocked late yesterday by the central bank’s decision to postpone so-called “tapering”, perhaps until 2014. The news reverberated through asset classes from metals to equities all of which surged significantly. Emerging market currencies and equity markets rallied on the news that the Fed would continue to buy long-dated US treasuries and mortgage-backed securities at the rate of $85 billion each month until such time as economic data out of the US showed the economy as being capable of standing on its own two feet. “We were quite stunned,” said an Asia World Capital Group strategist. “The overwhelming consensus has been for the Fed to reduce asset purchases by anything form $10bn to $15bn a month and, to a certain extent, that was priced in to valuations but no one expected a virtual U-turn. Fed Chairman, Ben Bernanke cited “recent” tighter financial conditions as one of the reasons why the voting members had elected to hold of the taper. The Asia World Capital Group strategist suggested that Mr Bernanke was alluding to the doubling of the yield on the benchmark US 10 year Treasury note from 1.5% in May to 3% in September. “Rising yields translate into rising interests rates in the mortgage market at a time when the fledgling recovery in the country’s real estate market simply cannot accommodate them,” he concluded. The firm advised clients to remain invested in hard assets like precious metals despite the downward pressure on prices in recent months. About Asia World Capital Group: Asia World Capital Group is an Investment Banking Advisory, Trade and Corporate Finance house, specialising in bringing quality issues to institutions, Small to Medium Size Enterprise (SME) and private clients. Their base of experienced professionals provides their clients with access to a range of Trade Financing Products, Financial Instruments, Investment Banking services, Pre-IPO and IPO opportunities, World-Wide Stock Markets’ Investments and quality professional advice to help move their business forward. Asia World Capital Group utilise their vast portfolio of affiliates, considerable experience and a range of financial instruments to achieve your goals. For more information contact: Asia World Capital Group Roger Bowden Room 2006-7, Tower Two, Lippo Centre, 89 Queensway, Admiralty, Hong Kong http://www.asiaworldcap.com info@asiaworldcap.com +85258084007
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Asia world capital group, stock markets, hong kong, federal reserve, Bernanke, QE3,
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