PRIOR WEEK MARKET MOVERS: ALL EYES ON CENTRAL BANKS

Part 1 of our weekly review and preview. See here for part 2 on the top 10 coming week’s market movers

 

Oh yes, there was some other data too.

 

Last week was packed with potentially dramatic event risk. In the end, however markets cared only about whether a given news item influenced the prospects of new central bank easing. It was through this prism that all events were viewed.

 

 

1. ECB MEETING: Anticipation of expected bold new action and reaction to the announced moves Thursday were the primary market movers Thursday and Friday.

 

2. US MONTHLY JOBS DATA

 

Second tier reports Thursday that hint at the Friday report results were bullish and so contributed to the optimism generated by the ECB. The actual data on Friday stank, but markets liked it, because ECB and Fed stimulus were now more likely than ever.

 

3. OTHER DATA

 

Poor data out of China, the US and EU had some secondary short term impact on price action, but in the end it was mostly ignored or seen as positive because it meant more money printing was more likely.

 

Markets no longer expect any good news about genuine growth prospects. Rather the focus is on government help. Thus risk assets performed extremely well thanks to the disappointing U.S. non-farm payrolls number (which makes new Fed easing more likely) and new ECB stimulus plans.  If the German Constitutional Court approves the rescue fund and the Federal Reserve eases, the rallies could continue.

 

DISCLOSURE /DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY, RESPONSIBILITY FOR ALL TRADING DECISIONS LIES SOLELY WITH THE READER.

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