We all recall the financial market effects from the Fed’s tapering in spring 2013, which largely contributed to a sell-off that drove the 10-year Treasury bill from just above 1.60% in early May 2013 to 3% only four months later. Figure 5. Euro forward inflation linked swaps (1-year-1-year & 5-year-5-year)  Source: ECB.
In the eventuality of such QE tapering, less monetary divergence between G-4 central banks will be on the cards for the second half of the year (Figure 6). Figure 6. Less QE from ECB, less monetary policy divergence  13  BoJ  Source: US Fed, Bank of Japan, ECB, and SG Cross Asset Research/Global Asset Allocation.