“The decision by these APAC central banks to “go hard and early” has provided further fuel to concerns of a global recession,” said Rodrigo Catril, a senior FX strategist at National Australia Bank. “This also means that the Fed will need to come to the rescue.”
Futures moved to price in a 100% probability of a Fed easing in September and a near 24% chance of a half-point cut. Some 75 basis points of easing is implied by January, with rates ultimately reaching 1%. All of which fuelled speculation that the major central banks would also have to take drastic action, if only to prevent an export-crimping rise in their currencies.
The euro has also bounced to $1.1210, from a two-year trough of $1.1025, while the U.S. dollar index has backtracked to 97.523, from a recent peak of 98.932.
Stocks can take comfort? Do they also purr? I wouldn't know, since like most folks I invest my money in food, gas, and housing.
*One* fix or Yuan?