Have been quiet for a while. Partly
very busy, partly due to the uncertain nature of the Fed QE. Having said that
global central banks will start QE soon on July 27, which is positive news for
the markets, it is very uncertain what they will do specifically. It is a good
surprise that ECB has done QE in the form of vaguely defined unlimited bond buy
for short term bonds of peripheral countries, which naturally boost up the
markets. However, what ECB can eventually do will depend on their testing of
boundaries under the resistance from Germany. Today’s employment news for the
U.S. should substantially increase the likelihood of the Fed for further QE in September,
which is likely the last chance that the Fed would do QE before the election.
So there are probably more legs for the markets, even though the good news
should have been fully prices; the markets always overshoot.
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