China, EU, and Japan are doing the QE for us. China this week ahead of their Lunar New Year holiday, Japan as early as next week, and the EU possibly in March.
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European and U.S. markets took heart after European Central Bank President Mario Draghi dropped a heavy hint that more stimulus could come as early as March.
His comments sliced 1 percent from the euro as markets quickly priced in a rate cut for March, three months ahead of previous forecasts.
GENEROUS LIQUIDITY
Speculation is also rife that the Bank of Japan might ease policy further, possibly as early as next week.
The central bank is "taking a serious look" at expanding its asset-buying campaign as sliding oil prices make it ever harder to reach its 2 percent inflation goal, the Nikkei newspaper reported on Friday.
All of which was grist to the mill for those expecting more action from the People's Bank of China (PBOC).
The central bank has already been generous with liquidity, pumping a net 315 billion yuan ($48 billion) into the banking system ahead of the Lunar New Year holiday in early February.
It was the biggest weekly injection since January 2014 and analysts suspected it was larger than that warranted to avoid any hint of a cash crunch during the long holiday.
According to sources, Zhang Xiaohui, an assistant governor of the central bank, said it would not rush to cut the amount of cash banks must hold in reserves, as doing so could send a strong signal on policy easing.
Yi Gang, a vice governor of the central bank, also said it would keep the yuan basically stable against a basket of currencies.
There was more reassurance from officialdom in Davos
“Hey, don’t worry; don’t be afraid, ever. Because this is just a ride…. And we can change it any time we want. It’s only a choice. No effort, no work, no job, no savings of money. Just a simple choice, right now, between FEAR and LOVE.” - Bill Hicks
