Well the last few weeks have been very interesting given the FED decided that now was the right time for QE3 given the stubbornly high unemployment rate which has been stuck above the key figure of 8% since Q1 2009. Furthermore the BoJ has also decided to pump more stimulus into its economy. Could this equal currency wars where countries' are all trying to devalue their currencies at the same time to make their trade more competitive internationally? Who could be the next country to inject liquidity into its system? I suspect China may be next. Therefore with all the liquidity being pumped globally do we expect higher commodity prices? I would think so as governments are taking a Keynesian approach to slower global growth and intervening to try and accelerate economic expansion. I expect gold prices to be supported as an alternative investment and would expect a short term correction and in general the markets as a whole before another rally up to all time highs. Looking forward to the US ISM figure where a number <50 would be a worrying sign and a fourth consecutive month where the manufacturing sector is in a phase of contraction in addition to the non-farm payrolls data. Good luck trading!
