QE, the dollar, and commodities

       

 Quantitative Easing

QE1 -                     November 25, 2008 - March 31, 2010
QE2 -                     November 3, 2010 - June 30, 2011
Operation Twist -  October 5, 2011- June 30, 2012
QE3 -                     September 13 - ??

The impact on quantitative easing has varied base don on the asset class that is used for benchmarking. The dollar has shown a strong tendency to decline during the QE periods. The exception was Operation Twist. The long bond showed consistent performance with rates rising during periods of quantitative easing except for the Operation Twist. Commodity markets seemed to move more to their own drummer, but still showed a tendency to rise during periods of QE. However, the impact of QE2 was smaller and the direction of the commodity index was down during Operation Twist. 

The impact of QE3 should be dollar negative, rates negative, and a potential to be positive for commodities.