The stock market is once again rallying on expectation of monetary stimulus from ECB president Draghi on 21 July (Thursday) and hyped-up speculation that BOJ Kuroda will resort to using what's called "helicopter money" , a convergence of unconventional monetary policy and fiscal policy , the monetisation of infrastructure stimulus that will likely take the form of big spending package at the next Bank of Japan policy meeting scheduled for 28-29 July.Ben Bernake has been in Tokyo 2 weeks ago and reportedly had lunch with Kuroda, followed by a meeting with Abe. These meetings has created much speculation of another `Bazooka` monetary stimulus in the offing.
Fed FOMC meeting scheduled from 26 – 27 July is not expected to raised interest rate, Yellen interest rates guidance into the next 6 months could turn the tide.
With this backdrop, the market is not expected to experience a steep correction until all the central bankers have their say. After the July month end, traders should be ready for a sharp correction in August.
Like the BREXT all over again its going to be `Sell On News’ with so much priced into the expectation of Central Bankers monetary stimulus this month.
All posts and charts are for educational and illustration purposes only
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