FXStreet (Guatemala) – Analysts at Rabobank explained that the triad we are currently most concerned with consists of Greece, China and the FOMC.
Key Quotes:
“Greece requires little introduction. Lawmakers have been forced to sign up to an onslaught of reforms they do not believe in, in exchange for a bridge loan and negotiations to structure a third bail-out package. The Troika (there you have those threes again) is back in Athens, amidst security concerns and technical difficulties. To say there are medium-term execution risks is an understatement.
China is mostly in the news because its equity market boom is going bust. But the bigger story is the heavy government intervention, which is forcing investors to reflect on what market mechanisms in China truly mean, while leaving real worries about the shape of the economy as a whole. It is easy to predict a gradual slowdown, but it is hard to forecast something concrete when official GDP figures don’t hold up to reality.
Meanwhile the FOMC is gearing up for the first rate hike in a long time. Even the doves are talking about slowly but steadily removing an exceptionally accommodative monetary policy. But major central banks have dug themselves some big holes, which will be hard to get out of.
There you have your “omen trium perfectum” – a nightmarish story in which Greece comes back to haunt us, China’s economy tanks, whilst the FOMC is caught in a policy normalization for which the time never seems right.”
(Market News Provided by FXstreet)