Two Central Bankers And A Finance Minister

Two central bankers and a finance minister will keep bulls and bears on their toes. One may give you money to spend and the other two will not allow you to. But all three will provide enough ammo to traders, long or short!
Beginning Monday, it’s going to be an eventful week. First, the budget on Feb 1 followed by the Fed rate decision announcement later the same night and 6 days later the RBI will announce its policy decision. The outcome of all three are clouded in uncertainty with a number of ifs and buts thrown in by analysts and experts in their pre-budget and pre-policy commentary.

Bulls will look for a strong growth-oriented budget and hope the Fed will not spoil the party later in the evening. Assuming the budget is bull friendly, the party may not last longer than 3 pm, at best. Nobody would want to risk a Fed event outcome 8 hours later but one never knows how the boldest of the bold bulls would behave. They could even look at the Fed as a transitory event and may stay long `come what may’ overnight. It’s possible the long market fellows may hope the RBI could carry on the baton of growth passed on from the finance minister. The RBI may not be accommodative but, could be less harsh and get into a wait and watch mode with limited damage done. That’s fodder enough for the bulls.
So, what about the bears? They have been struggling to come back in a big way. Every attempt has been countered and sometimes they look extinct, almost! Their only hope could be Fed Chair Jerome Powell. If his commentary remains the same it will spook global markets which could help bears make one more attempt the next morning. But then there are these buy-on-dips fellows waiting to step in after every gap down. Poor bears, may then be pushed back, once again!

All these possibilities if the above narrative plays out, but then it could simply be a different story. So this story too ends with `ifs’ and `buts’. What is guaranteed though is BQ Prime’s live coverage with special  analysis and expert views from a cross section of experts.