Financial Markets Building up for More Quantitative Easing
The CFD markets really are building up for a second round of quantitative easing and the rally is continuing to gain impetus. It seems somewhat unstoppable at present and, with every move higher, CFD account holders are continuing to sell into the strength as they expect a correction.
It’s comprehensible to believe that the recent upward movements are over done, especially with what’s happening in the ‘real world’: job losses and austerity measures are all anyone is talking about, growth hardly seems imminent. It was only several weeks ago that the market was struggling with a double dip on the cards.
However the financial markets aren’t interested in the current situation. It is, instead, revelling in the fact that another round of monetary easing is on it s way. For the second round, however, there will need to be a huge effort from the US Federal Reserve in order to kick the economy back into action and also, more crucially, stop it from slipping back into a recession.
The day trading markets will most likely continue to rally for as long as the speculation that more easing is on its way. Once it is announced, presuming it is, of course, we could see a sell off. This will be a ‘buy the rumour but sell the fact’ type scenario.
The US Federal Reserve meets again on Nov 3, and this may be the date of announcement. Certainly, we can expect some rather disappointed investors should more Quantitative Easing not be announced at that point. It could, of course, be announced in December instead.
If you are investing then note that with CFD trading and spread trading you can lose more than your initial investment. CFD trading and spread trading carry a high level of risk to your capital so before trading, ensure that they match your investment objectives. Familiarise yourself with the risks that are involved. Where necessary, seek independent advice.
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