FED's move to boost emerging markets

The FED’s move to lower interest rates by quantitative easing will most likely not have the expected effect. Households and governments in the developed world are deleveraging and corporates know this, meaning that they will investment elsewhere as demand will remain flat for some years in developed markets.

Naturally corporates will look for investment opportunities with emerging markets as the demand is there and there is very limited debt – both on the household and government sides. So you if you should state this in a headline manner you might say that the US government just boosted investments in emerging markets by USD 600 B.

In terms of intraday events,  look out for German factory orders and US Employment Report later in the day. There will be great attention on both numbers, but the US numbers have the potential to move the market as the unemployment rate is widely expected to move higher for the foreseeable future.

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