Markets await details on the Fed's proposed bailout program, as the significance of this event is likely to pose bearish sentiments on the US dollar, as a combination of a loose monetary and fiscal policy, is usually seen as a problem for a country's domestic currency, similary over time, this countercyclical moves may be presumed to improve liquidity in the economic pipeline, and to provide firms the opportunity to realign their balance sheets. The bond markets may very well have to witness an increase in the outstanding U.S. government debt.
Currently, US Dollar trades weaker against the EUR, CHF, JPY and GBP.
Asian bourses closed higher with the Nikkei gaining. Shanghai and Shenzhen gained modestly making an approximate 20% over 2 days, following steps taken by the China government to boost stock prices. The U.S. equity markets will be opening lower later.
10-yr JGBs were also weaker. Commodity currencies are broadly mixed. Gold advanced only modestly. Oil is firm as it looks now like it wants to hold above the $100 line.
Stay tuned for my next post as I will describe further on the mechanics and rules of my trading system.
Cheers.
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