The best week for Asian shares in five months and a second big weekly jump in oil prices put global markets in a buoyant mood - even as they ask whether central banks can deliver enough monetary easing power for a lasting boost to the economy. Kirsty Basset reports.
Some respite for investors this week - Asian shares saw their best week in five months, as recent worries about a potential global recession seemed to be set aside. Simon Smith from FxPro says he'll be watching to see whether the data validates the current levels. Soundbite (English) FxPro Chief Economist, Simon Smith saying: "Are we facing a greater slowdown, particularly in China, that being the case, then I can see the rebound we've seen in the last 2-3 weeks more being a sort of pause in a greater down trend." And markets were buoyed by the second six per cent weekly jump in a row in oil prices. But will it continue? Soundbite (English) FxPro Chief Economist, Simon Smith saying: "I don't think we're heading massively higher from here. I still think there's been a huge structural change in the oil market ." The ECB will be taking note of how low oil prices are impacting the euro zone economy, ahead of its meeting next week. With expectations it could cut the deposit rate even further into negative territory. But it may not provide the intended boost. Soundbite (English) FxPro Chief Economist, Simon Smith saying: "They've moved into negative rates on deposit facility unit, supposedly to sort of encourage banks to lend money out rather than park it with the ECB. What's happened is the amount of funds parked with the ECB has just increased massively over the last three months since the latest move from the ECB. So it's not working the way they intend." Fuelling the ongoing debate about whether central banks have run out of ammunition.