That seems to be Mr. Market’s take on today’s Bernanke speech. He may not have tipped a move at Jackson Hole but he didn’t slam the door either, merely turning the focus to the now-two day FOMC meeting in September.
This market won’t believe QE is well and truly dead until they see a corpse with a stake through its heart.
EUR/USD, GBP/USD and AUD/USD all remain near their highs, boosted by a solid rally in US equities.
Next week we will get to compare and contrast the remarks of Trichet and Bernanke. If Bernanke comes out looking like the hawk (based on his reluctance to tip QE) and Trichet signals a willingness to ease soon, the EUR bid could be short-lived. As I noted earlier, if the ECB intends to ease any time soon, they will likely do it while Trichet is at the helm so that Draghi isn’t forced to ease early in his tenure at the ECB and thus spur fears he’s an inflation lovin’ Eye-talian.
