Daily Alert – Wednesday 4th March 2020: US and Canada surprise with rate cuts, others to follow
The big surprise yesterday was the Fed, outside of the normal meeting schedule, cutting rates by 50 basis points. The Bank of Canada followed today with a 50bp cut vs the expected 25bp cut. The expectation is that all major Central Banks will adjust their monetary policy in the same way (i.e. more rate cuts to come).
My S&P500 long gets a boost from the Fed move and I close it out for a gain of around 2.8%.
I will be watching the EUR closely. It has rallied recently for no apparent reason and the expectation of a rate cut will pull it down. It has already turned and begun to head back down as I write.
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