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Forex Flash: The impact of BoJ easing on global fixed income - Goldman Sachs

FXstreet.com (Barcelona) - Goldman Sachs analysts note that on April 4, the Bank of Japan announced a much stronger than expected monetary policy stimulus and the combination of larger purchases and maturity extension had a significant and immediate positive impact on the Japanese and foreign fixed income markets.

They expect the BoJ easing to continue to have an impact on domestic yields, but see no strong evidence that the BoJ asset purchases program will continue to have a sizable spill-over effect for other developed government bond markets. They forecast an increase in 10-year JGBs from current levels. They write, “Our end-2013 forecast is 75bp, up from 58bp currently and roughly in line with the forwards. The BoJ’s injection of liquidity should ease financial conditions significantly, supporting growth and inflation expectations. This, together with higher US nominal interest rates, should push up interest rates (mostly through an increase in ‘breakeven’ inflation), more than compensating for the downward pressure on yields as a result of the lower net supply of JGBs available for private investors.”

Forex Flash: FOMC in focus with Asia and Europe closed - BTMU

Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that with much of Asia and Europe closed today, by far the main event of the day will be the FOMC announcement at 1900 BST, which will come after the key ISM manufacturing report and the ADP employment report.
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Forex Flash: Focus on the FOMC today - Deutsche Bank

Jim Reid, of Deutsche Bank notes that the FOMC meeting statement at 7pm London time is the main focus of the day.
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