The times they are a changin’. Traders aren’t looking to Washington for their cues, they’re looking to Beijing. And with the spotlight heavily focused on the Chinese capital last night, it was Wen Jiabao who disappointed the global markets. Traders had been led to expect a major new stimulus package but were left with few detail. After a sharp run-up in share prices in western markets on Wednesday, prices have fallen sharply on Thursday.
We next turn our attention to Frankfurt as Jean-Claude Trichet gets set to take his monthly star-turn. A 50 bp cut in the refi rate is expected, though there is one analyst doggedly predicting more. Much more.
With the Fed, BOJ, BOE, and BOC already on the QE band wagon, the ECB is the lone holdout among the G7 central banks. It seems to be purely a matter of when, than if.
