US stock markets closed up in yesterday's trade on the back of eased worries over the fiscal cliff and expectations of more global monetary easing. Nikkei is up more than 1.5% this morning.
Monetary policy is setting the agenda for the global FX markets. The ECB is the only major central bank not expected to deliver more monetary easing. As a result EUR is trading close to a 7-month high against USD this morning.
NAHB Housing Market Index hit a 6.5-year high in December.
Markets Overnight
The rally continues in the global stock markets driven by optimism that the fiscal cliff will be avoided in the US. Maybe more importantly, the outlook for monetary easing to be stepped up around the world is also helping risk appetite.
Yesterday three European central banks – the Swedish, the Hungarian and the Turkish – cut interest rates. Weaker growth, lower inflation and the lead from the major central banks of the world – particularly the Federal Reserve – seem to be "jolting" central banks into monetary easing and that is helping global risk appetite.
Higher risk appetite helped US stock markets yesterday and European stock markets ended the day near highs for 2012. This morning the Asian stocks markets are also generally trading in positive territory. The Nikkei is trading above 10,000 and is up more than 1.5% on the day. There is no doubt that it is the expectation of an easier monetary policy that is pushing Japanese stocks higher.
In the currency markets the monetary policy prospects are also the key market mover. The question is which central banks will deliver more monetary easing and which will not? Among the major central banks the Federal Reserve is already delivering more monetary easing. In Japan the new government is likely to put pressure on Bank of Japan to deliver on monetary easing and in the UK speculation that the Bank of England could introduce a nominal GDP target is building.
The only real exception is the ECB. As a result the euro keeps strengthening against the other major currencies. This morning the euro is trading close to a 7-month high against the dollar. Similarly, the yen keeps weakening on the expectation of monetary easing from the Bank of Japan.
And it seems like the Federal Reserve’s monetary easing is helping – at least the US housing markets. Data published yesterday showed that the NAHB Housing Market Index rose to a 6.5-year high of 47 in December.
To Read the Entire Report Please Click on the pdf File Below.
Monetary policy is setting the agenda for the global FX markets. The ECB is the only major central bank not expected to deliver more monetary easing. As a result EUR is trading close to a 7-month high against USD this morning.
NAHB Housing Market Index hit a 6.5-year high in December.
Markets Overnight
The rally continues in the global stock markets driven by optimism that the fiscal cliff will be avoided in the US. Maybe more importantly, the outlook for monetary easing to be stepped up around the world is also helping risk appetite.
Yesterday three European central banks – the Swedish, the Hungarian and the Turkish – cut interest rates. Weaker growth, lower inflation and the lead from the major central banks of the world – particularly the Federal Reserve – seem to be "jolting" central banks into monetary easing and that is helping global risk appetite.
Higher risk appetite helped US stock markets yesterday and European stock markets ended the day near highs for 2012. This morning the Asian stocks markets are also generally trading in positive territory. The Nikkei is trading above 10,000 and is up more than 1.5% on the day. There is no doubt that it is the expectation of an easier monetary policy that is pushing Japanese stocks higher.
In the currency markets the monetary policy prospects are also the key market mover. The question is which central banks will deliver more monetary easing and which will not? Among the major central banks the Federal Reserve is already delivering more monetary easing. In Japan the new government is likely to put pressure on Bank of Japan to deliver on monetary easing and in the UK speculation that the Bank of England could introduce a nominal GDP target is building.
The only real exception is the ECB. As a result the euro keeps strengthening against the other major currencies. This morning the euro is trading close to a 7-month high against the dollar. Similarly, the yen keeps weakening on the expectation of monetary easing from the Bank of Japan.
And it seems like the Federal Reserve’s monetary easing is helping – at least the US housing markets. Data published yesterday showed that the NAHB Housing Market Index rose to a 6.5-year high of 47 in December.
To Read the Entire Report Please Click on the pdf File Below.