Eventually, nothing may work and central banks run out of options: Ian Hui, JP Morgan

In a chat with ET Now, Ian Hui, Global Market Strategist, JP Morgan, says we should hopefully see positive reaction from the economic numbers and growth numbers in the near future. Edited excerpts

ET Now: What is it that you are making of Draghi’s commentary? He has talked about stimulus but is the market going to ignore this at the moment?

Ian Hui: He is definitely trying to get market expectations up. I would agree with the idea that a lot of the current central bank action we are seeing is to try and sort of boost central bank growth, try and maintain inflation expectations. What we have seen so far probably has not quite worked out as well as planned but then flow backs also caused quite a bit of worries. The biggest worry is that the central bank action is not quite enough but hopefully with the Fed ruling out QE expansion, we should hopefully see positive reaction from the economic numbers and growth numbers in the near future.

ET Now: Considering that central bank policy action so far has failed to revive growth, whether it is Japan or even the United States, do you think somewhere more monetary stimulus means more bad news and that means that central banks are not confident of what is going on and what is coming next?

Ian Hui: This is fairly difficult to answer. It may be that the market considers that if the central banks rule out more actions, they are running out of things to do. That is probably quite a considerable concern in Japan. There could be worry that what they are doing would be enough and if they do roll more, it could be considered bad news or good news depending on if the market has stabilised and how it is reacting. For the moment, the market is still probably thinking that it is good news that they will get more help from central banks. Yes, there is a concern that there will be eventually a scenario where they do believe that nothing seems to be working and that the central banks are running out of options.