Flash: Markets develop addiction to liquidity – Deutsche Bank

FXstreet.com (New York) - Emerging markets fundamentals are still poor but this accepts the notion that some have corrected a fair bit and that there could be a relief rally if bond yields rally again and the Fed holds back from imminent tapering.

Ultimately, “Many have agreed that the fundamentals continue to be worrying, the Fed probably has it in their power to stabilize markets by easing off the tapering discussion. However, this is unlikely to be immediate and volatile markets are likely in the days/weeks ahead until we have a bit more clarity on the Fed. Markets are addicted to liquidity and it's not going to be easy to wean them off this.” warn Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.