Investment - Articles - QE3 likely to be off the menu

 Market report from Interactive Investor Mike McCudden, Head of Derivatives at Interactive Investor, gives his thoughts on the current trading outlook for investors.

 "With the Dollar strengthening and gold well off its highs, we can be fairly certain that QE3 is off the menu at Jackson. We had seen some bullish signals on QE3 earlier in the week but they seem to have dissipated. US equities had earlier bounced on the back of bad housing data, worryingly signalling that this may force Bernanke's hand on the issue.

 "Bernanke knows full well that another shot in the arm with QE3 may be a short term fix, but is not a long term solution. Indeed, we will probably see a drop in stocks and have traders digging out their copies of ‘Reminiscences of a Stock Operator' to brush up on their bear trading strategies. "A reality check is in order, and without strong leadership in the US and the Eurozone delivering on long term solutions, we will be stuck chasing artificial highs if we go down the route of QE3. QE3 may be the popular choice of investors but I don't believe Bernanke is about to be swayed by the mob. "Going in to the bank holiday weekend is traditionally a calm time on the markets but this time round we can expect fireworks."