With Fed's dovish stance, and the withdrawal of Lawrence Summers as candidate for Fed chairman, the biggest tail risks for risk assets were removed this week. In combination with lower tail risk from Emerging Markets and ongoing global recovery, this puts risk assets in a sweet spot.
US forward-looking indicators continue to be strong, while hard data on consumption, housing, capex and payrolls have been on the soft side. This keeps Fed on the cautious side.
The Fed also secured a continued consolidation in the bond markets and carry trades should benefit from ample liquidity, lower volatility and lower tail risks.
The USD strengthening got postponed with the Fed announcement, but it is still intact for 2014 when US hard data are set to get stronger.
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