Year to date – Review

Let’s wrap up the events that happen!

·         MENA tension – triggered Q1 bearish sentiment in Asia, higher oil prices to-date

·         PIIGS sovereign debt issues – have not triggered events in Asian markets, yet!

·         Japan – Earth quake, Tsunami and nuclear crisis – triggered Asian markets bearishness the week following Mar 11th

·         S&P negative outlook for US debts – triggered Asian markets for 1-2 days beginning Apr 18^th.

(We all know there are many negative sentiments always, but the financial markets do NOT move until the event is triggered. Just like Lehman and Greece (May 2010). We all know the event is there but constant monitoring will identify the trigger and pro-active (and reactive) management will help us to seek low yielding asset classes!)

As of April 26^th, today

·         A much lower USD index at 73.8 thereabouts – higher commodity prices.

·         VIX (Volatility index) - 15 to 16 thereabouts. < 20 is considered low!

·         QE2 consequences – lower USD, much higher commodity prices, property prices, higher inflation,

·         US markets closed at highest point for Year 2011 – a better corporate earnings report (so far)

·         Asian markets recovered with S Korea breaking new high, STI back at 3200 level today, HK back at 24000 level, Mumbai – rose from 17500 to current 19500 and so on.

My interpretation to the market bullishness

Investors ignoring negative sentiments, taking opportunity to buy when equities retrace

USD is weak and VIX is comfortably LOW. There is (still) an on-going sign of Risk appetite seeking higher yielding assets in MOST asset classes

From now onwards, we will be watching how the Feds will conclude QE2 in June. There MAY/ may not be a discussion by B Bernanke tonight following FOMC rate decision, Thursday 1230 am. BUT analysts will be screening his speech/language word-by-word to decipher where his directions would be!