So far, equity markets are grinding higher, pushed by better-than-expected U.S. data resisting fiscal headwinds. Rates have re-emerged as a major driver of currencies. The European Central Bank (ECB) may yet cut rates but the reality is after such a move, we would return to trading currencies in a zero interest rate policy (ZIRP) world, with far less volatility and a market under greater central bank control, just like before the rise of Abenomics.
So far, equity markets are grinding higher, pushed by better-than-expected U.S. data resisting fiscal headwinds. Rates have re-emerged as a major driver of currencies. The European Central Bank (ECB) may yet cut rates but the reality is after such a move, we would return to trading currencies in a zero interest rate policy (ZIRP) world, with far less volatility and a market under greater central bank control, just like before the rise of Abenomics.
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