There are two trains of thought in the market now that QE2 (despite the protestations of one Fed member) seems inevitable with numbers to the tune of around $500billion being most commonly used:
- The number is less than this and there is no mention of further action early next year. This would lead to a buy-rumour-sell-fact sell off in equity markets and and sell off in FX risk-trades
- The number is bigger than $500 and there is an expectation for more to come. In this case, the USD will get thrashed.
Pick your poison.
