Another week but more of the same as fear and uncertainty once again dominates. The Central Banks' job is to step in when that happens and step in they did. The Fed cutting its main rate to 0-0.25% and confirmed $700Bn worth of QE (U$500bn of Treasuries; U$200bn of agency MBS). They also announced “co-ordinated action with other central banks to provide U$ swap lines” and took measures to ensure the supply of credit for US businesses and households. The measures are good (I guess any help counts!) but we continue to believe that more targeted measures are needed – click here to read our latest strategy piece on this topic. The RBNZ cut rates to 0.25% (from 1%), the PBOC injected more cash to the banking system and the BOK cut its rate to 0075% (from 1.25%). The BOJ announced much more targeted measures, which is what other parties should be doing. Keep your eyes on this space as we expect to hear more noise as the day progresses.
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