The latest news came yesterday when China’s Ministry of Railways said that it will spend 470 billion yuan ($74 billion) on railroads and bridges this year. That’s the second increase in railway spending plans in July. The increase wasn’t the subject of a government press release, but was “announced” in a ministry bond prospectus.
No secret what the big events that investors will hang on this week: The Federal Reserve’s Open Market Committee meets on Wednesday, August 1, and the European Central Bank meets on Thursday, August 2. But how will financial markets react to central banks’ moves?
U.S. economy grew at just a 1.5% rate in the second quarter–the odds that the Fed will announce a new stimulus program just went up
This morning the Bureau of Economic Analysis reported that U.S.GDP grew at an annual rate of 1.5% in the second quarter of 2012. That’s down from a 2.0% growth rate in the first quarter of the year. And from 4.1% growth in the fourth quarter of 2011. But—drum roll, please—the 1.5% growth rate was better than the 1.2% expected by economists
Today’s rally is built on traders deciding to avoid event risk after Draghi says the ECB will defend the euro
ECB President Draghi’s comments this morning reminded traders that the central bank meeting is just a week away and that the European Central Bank could take action that would put everybody who has made money in recent weeks betting against the euro, and Spanish and Italian bonds, and European stocks in danger of giving back all or most of their gains.