Morning Report Thursday 12 March 2015
With Quantitative Easing (QE)/interest rates the dominant factor at present for equity markets, it makes no sense for traders/investors in the Australian equity market to be looking to our American friends for future trends. The US is about to end QE and start raising interest rates, a number of economists are predicting as soon as June – see chart 2. Importantly, even if rates remain on hold until 2016, there currently appears zero chance of further rate cuts/QE in the US. Conversely, Europe has committed to boost inflation and the $US1.1 trillion QE has entered its 3rd day sending the DAX up another 2.7% - see chart 3.
• So far in 2015, the DOW is -1.1%, the German DAX is +20.4%, the Japanese Nikkei + 7.3% and the ASX200 is a healthy +7.1% - QE domination.
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