I’m not sure I believe this but it’s out there.
Chicago Fed President Charles Evans speaks at 1900 GMT (3 p.m. ET) and there is said to be trepidation about dovish comments. I don’t see it, Evans is the dovemaster and he’s not even a voter on the FOMC this year. Six weeks ago, he came out in favor of “very aggressive” QE3 in MBS and it’s doubtful that he will change his tone, but that shouldn’t surprise anyone.
The other half of the chatter is fears about dovish comments from NY Fed President Dudley who speaks Monday morning. Dudley is Bernanke’s right-hand man and usually only speaks when he has something to say. The chatter is that he could hint at more QE (sterilized or not) but the risks are two-way because he could also take it off the table. Certainly there are some risks with Dudley but I doubt it’s enough to spook markets so far in advance.
In any case, bonds remain bid, with 10-year yields now at 2.29% compared to 2.36% at today’s high. The falling yields are blocking attempts to push up USD/JPY, from the current 83.30/40 range.