It was nothing short of theatre yesterday with announcements from Mario Draghi (Europe) and Janet Yellen (US).
Despite what the markets generally expected, Mario Draghi’s announcement fell somewhat short yesterday and lead to sharp falls. It was the general recovery in the European sector that led to his lukewarm stimulus package.
In essence, the sentiment is that he over promised and under delivered.
In the US, Janet Yellen commented on how the strength of the US Dollar is having a drag on exports and this will be one of the reasons as to why the Fed will take a gradual approach to the tightening of monetary policy. She again indicated and that the short-term interest rates are likely to rise in December.
So, what does this mean for our outlook? Well, despite all the noise, simply, nothing has changed. Europe is in the early stages of recovery whilst the US is strong and is further along the economic cycle.