Citigroup: It seems that some investors have begun to expect a QE4.
Although the majority of market participants and analysts are asking when the Fed will raise interest rates again, Citigroup’s chief of global FX strategy Steven Englander has proposed asks a different question: whether the investors expect a QE4? How else to explain the fact of that dollar index continued the downward trend?
Englander noted that since the recent US economic data is not satisfactory, good times and bad has made the data results from Citigroup Economic Surprise Index dropped significantly since April highs.
Englander said the dollar index fell below the recent average of 100DMA trend, the reason to suspect that some investors seem to have ruled out in June or July rate hike again, and began to expect before May 2017 the Federal Reserve is not there will be another interest rate hike. And in the data is poor enough, the Fed may even choose to cut interest rates. Then think of the Fed’s policy of negative interest rates for each of understatement, the future of the financial markets the real “script” and may indeed be related to negative interest rates or QE4.
Englander further pointed out that before the implementation of negative interest rates, the Fed needs to be launched QE4 “clear the way.” As an important factor supporting stocks before the market stronger, QE of “efficacy” has been suspected market.
Although Englander itself or more likely the Fed will raise interest rates twice during the year to determine, but the market’s performance and mood, he still believed that if the data is really bad to only support a rate hike, then the possibility of negative interest rates and QE4 sex will not be excluded
After all, from the perspective of bond yields, the United States does have “trotted” space …… >>