Earlier in the week, we posited that if FOMC Minutes didn't ruffle too many feathers, then next week's 2-day Bernanke Congressional Testimony would give the the follow-up and conclusion to the collective FOMC stance. Said stance seems staid. Alliteration aside, the minutes didn't surprise, and there's a decent enough chance that Bernanke won't either. In fact, it's entirely possible that the early January FOMC Minutes simply nudged sleepy markets, introducing the possibility that they might need to emerge from the QE-induced dream at some point in the future, but could continue mostly dozing for now. False Alarm?
This leaves the door open for myriad other considerations in the coming two weeks. This isn't to say that Bernanke couldn't be a huge factor for bond markets, but rather, that he won't be a factor if he doesn't much deviate from what's already been said. In other words, markets aren't waiting for clarity on an already existing picture, but rather to make sure that nothing comes along to change the picture as it's currently perceived. Even before Bernanke, Italian elections on Sunday and Monday could be a big deal (or no deal at all). Follow all that up with a boat-load of economic data and it's off the races again in the week ahead.
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