US Treasury yields should remain anchored even if the scale of additional quantitative easing (QE) disappoints. We are sceptical, however, that the rally in the US equity market will last much longer given the outlook for earnings – emerging equity markets should continue to outperform. Nonetheless, even if another round of QE only improves the prospects for the US economy a little, this should be good for the dollar, which would be bad for the prices of many commodities.
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