by BCA Research
Global equity and commodity prices have cheered the Fed’s dovish forecasts published last week. Meanwhile, the stability of the yuan is another source of glee for EM and commodity markets. However, we continue to expect the Fed-induced rally to be short-lived.
[…] After a disappointing reaction to the ECB’s policy easing on March 10, global equity and commodity prices have cheered the Fed’s dovish set of forecasts published last week. Also, the recent period of stability in the yuan is defying many market participants’ dire expectations. True, the previous dose of fiscal stimulus undertaken by the Chinese authorities could spell a temporary period of strength in the Chinese economy, which would help the EM and commodity complex for a few months. But the burden of proof remains high for this second scenario.