Thursday, October 1, 2015

Global risk sentiment undefined - ANZ

FXStreet (Bali) - As the Research Team at ANZ notes, risk sentiment remains very unstable, with risk-on and risk-off swings alternated almost on a daily basis, as the market awaits the next big catalyst.

Key Quotes

"Global risk sentiment is swinging between optimism and pessimism on a near-daily basis at present, as nervous market participants evaluate whether the volatility seen in late August is just a bad memory or will prove to be a harbinger of larger trouble down the track."

"Markets will likely continue to zig-zag until we get a clear signal one way or another. Possible catalysts for a big move? A shocker of a print in a closely watched US data series would not go down at all well at present, one suspects, while on the other side of the coin, an announcement of fresh stimulus from a major central bank would likely cause some equity market glee, for a while at least."

"But St Louis Fed Governor Bullard warned against this kind of thinking in a CNBC interview this week: “I’ve got a message for your friend Jim Cramer. The Fed cannot permanently raise stock prices. And to have him cheerleading for lower rates 24 hours a day is, I think, unsavoury.”

"It is if central banks lose their power over market sentiment that things will get really interesting."
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