3. Everyone's hoping for fiscal policy now
With ever-increasing questions over the willingness and ability of central banks to keep on 'QEasing', more investors are looking to government-led measures to help spur economic growth. Expectations of such fiscal measures have been rising in Europe and Japan, despite increasing budget deficits, as well as in the U.S., Garzarelli argues.
"In the U.S., discussions on the possibility of an easier fiscal policy are linked to the outcome of the Presidential election," he says. "But the market appears increasingly responsive to such moves, as it considers them more effective in supporting final domestic demand when interest rates are close to their effective lower nominal bound."
This article was provided by Bloomberg News.