International News – 22 January 2016
There was a lot of noise, but most of it related to trading activity as opposed to fundamentals.
The Japanese and European share-markets in particular broke down through key trend-lines (much like the ASX200 sadly) and seemingly breaking trends that had been in place for 3-5 years between them.
This is significant in the sense that it signals we are absolutely moving into a different phase for stock-markets in the years ahead.
The uptrend is now over and the issue is now whether it is sideways or down.
China injected an enormous amount of liquidity into its banking system to further comfort unsettled nerves and in part in anticipation of Chinese New Year (commences February 8th).
The massive injection of funds into the banking system arguably diminishes the chance of an interest rate cut that we had been expecting ahead of Chinese New Year.
In Europe, the ECB Governor spoke on Thursday night and intimated he might be prepared to increase stimulus to the European economy.
Sigh. The Bank of Japan are supposedly expected to have another swing of the bat on this front next week, but it seems to be having diminishing impact as we get deeper into the stimulus.
Earnings season continues next week and again the focus will be on Apple on Tuesday night our time – markets aren’t expecting pretty numbers.
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