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Flash: QE in some form will persevere for years – Deutsche Bank

FXstreet.com (Barcelona) - The US markets witnessed a recovery from a weak open with the S&P 500 recovering throughout the day to close 0.9% off the opening lows and finishing -0.29%.

Considering the overall volatility that preceded it the US market session was remarkably dull – some of the 'tapering' fears were probably eased by comments from San Francisco Fed's Williams where he told Bloomberg news that the Fed could step up the pace of QE again after tapering and that they won't go on autopilot. St Louis Fed's Bullard said that the Fed was not "that close" to tapering QE, and noted that "even if we do taper it would still be a very aggressive pace of purchases because we would only be moderating by a small amount."

Indeed, “we do think QE or derivations thereof will be around for many years to come even if there is a possibility of slowing purchases in the near-term.” note Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank. Better US data perhaps also played its part yesterday in stabilising markets with initial jobless claims (340k v 345k) coming in stronger than estimates while the Markit US PMI Preliminary number (51.9 v 51.2) also topped market consensus.

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