The Federal Reserve launched a last-ditch effort to shore up the US economic recovery with a new $600 billion round of Quantitative Easing. The Fed’s first $1.75 trillion bond-buying program ran from December 2008 to March 2010.
As widely expected, Republicans regained majority in the House of Representatives while Democrats kept control of the Senate. No party has power to pass legislation without the other one, which will lead to compromises or gridlock.
Source: Exane
My View: The markets have been quite muted so far. The S&P 500 closed 1197.96 last night and the future has some what crossed 1,200, which is widely recognized resistance. Investors are much neutral about the markets but there should be some upside in the short term.
US Dollar index has been again down the drain, with EUR/USD currency pair up another 100 pips last night. I’ve mentioned in my yesterday’s blog about the currency risk involved in Singapore investors’ portfolio. If the dollar weakness continues, investors should pay more attention to their currency exposure.