Global Quantitative Easing Brings Hope


(US) Renewed risk appetite helped to weaken the USD and JPY currencies against the European currencies.

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(AU) AUSTRALIA Q1 GDP Q/Q: 1.3% V 0.6%E; Y/Y: 4.3% V 3.3%E (multi-year high).

(AU) Australia Treasurer Swan reiterated that the budget surplus gives the RBA plenty of scope and he still expects strong investment into the country.

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(CN) China Securities Journal in a front page piece said the PBoC should cut rates in order to boost confidence and prevent overly large swings in domestic economic growth.

(UK) Morgan Stanley sees BOE increasing its Asset Purchase Target by £50B to £375B in tomorrow meeting

(UK) Deutsche Bank and Citi also expect the BoE to expand its Quantitative Easing at Thursday’s meeting. Some believe that the release of services PMI out of the UK (due Thursday before the BoE meeting) could be a factor which determines whether or not the BoE eases further.

(US) Fed’s Williams (FOMC voter): Must maintain stimulatory monetary policy stance (Quantitative Easing), Fed must be ready to do more if needed.

How to interpret these headlines?

Today’s market is looking remarkably more optimistic starting with AU Q1 GDP Report which showed that Australian economy grew more than twice market concensus, followed by a string of reports on potential easing from China, U.S., and UK.  The threat of joint JPY Intervention from yesterday’s Japanese Fin Min comments after the G7 conference call also added selling pressure on the JPY.  Both USD and JPY traded weaker against other majors, although the long-term picture is still uncertain in my opinion.

I recommend everyone to watch next week’s FOMC Decision and the upcoming Greek election on the 17th of June… I believe these two events are going to determine market’s risk sentiment for the month…  In the meantime, I will not be too haste to buy the EUR or AUD as the uncertainty in Europe and the potential of a sharp slowdown in China still pose threats.

FUNDAMENTALS
Forex Weekly Outlook May 22 ~ 26, 2017
Central banks cannot keep pumping cheap credit into series of asset bubbles
China stock market keeps crashing, loses all 2015 gains
Global stocks tumble as Ukraine accuses Russia of invasion
Is Yellen Asking WWBD (What Would Bernanke Do?)
About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

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  1. […] and boosted market risk appetite sentiment.  Along with the surprise rate cut, China also has plans to stimulate 7 key areas of its infrastructure and are likely to support its market to endure the slow growth and in turn, help AUD to remain in […]

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