A quiet day all around with US bond market closed due to Columbus day.
The ag market continued Friday’s gain but in a more subdued manner.
Right now the main question is how much of QEII is priced into the market. My guess is that the markets are pretty fully valued in QEII terms – meaning that I believe further bad economic news would be a negative impact on stock and commodities. Lately, bad news was seen as boosting likelihood of strong QE -> assets rise. I think this effect is wearing off.
US FOMC meeting note will be released tomorrow and it will shed light on what the Fed is thinking and is likely to be a big market mover.
In UK we will see the inflation data for Sep. My guess is that we will see a drop due to falling home price and decelerating economy. I think it’d exert a downward pressure on GBP
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