Intraday Thoughts – April 02, 2009
By Mark De La Paz | Published on April 2nd, 2009
Today’s well-publicized event risk will be the G20 meetings though how things are going to turn out there is any bodies guess. One thing that is clear, we will not get the kind of global coordination on stimulus efforts that the Americans prefer, as European delegates are likely to stick to their pop-gun approach than massive spending considering guidelines set by the Euro charter. With governments heavily in debt the west may want to spend its way out of a recession but it takes a bold politician to raise the specter. Meanwhile Asian giants will be joining with hopes of raising their international profiles, though the Japanese are likely to be stymied with their worst recession in decades while China is likely to get more things on its direction as already we hear willingness on further strengthening the IMF. A revival of the SDR’s role in global economics to the extent of immediate post-Bretton Woods era though is unlikely, there will be no free lunches and the Chinese would have to allow market forces to dictate the Yuan’s value and be ready for the responsibility if they seek to supplant the dollar with another as a reserve currency. For the markets then expect an even more jittery trading day though lets not forget that we will also be seeing an ECB rate decision with yesterdays action suggesting we are already pricing in a 50bps cut again considering the slide in EURGBP.
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