Speculation on central bankers

"Speculation is only a word covering the making of money out of the manipulation of prices, instead of supplying goods and services" - Henry Ford It’s speculation time this week on what central bankers will do. The Reserve Bank of India will hold its monetary policy review meeting tomorrow. On Wednesday, the US Fed's open market committee will meet while on Thursday the European Central Bank's rate and monetary policy meeting will take place. High inflation, rising fiscal deficit and monsoon worries could well hold back the RBI from cutting rates. The rainfall from June 1 to July 25 was reportedly 22% below normal. Expectations are the monsoon will strengthen during the first week of August. The outlook is positive at start. A host of results will keep the counters buzzing. Remain extremely cautious on the mid-cap counters because you would not want to be caught in a situation like last week when stocks tumbled mercilessly. US indices closed in the green on Friday on expectations that central banks in Europe and the United States will do the needful to support the economy. Asian stocks are up for a third day on similar hopes. The market is pinning hopes on US Fed's Federal Open Market Committee announcing some asset purchase programmes while no further quantitative easing is seen. Draghi last week had affirmed that the ECB is ready to do whatever it takes to preserve the euro. Results today: GAIL India, Bank of Baroda, Bharat Electronics, Oriental Bank of Commerce, Allahabad Bank, Indian Overseas Bank, Syndicate Bank, Havells India Titagarh Wagons, Future Capital Holdings, Greaves Cotton, Firstsource Solutions, Noida Toll Bridge Co., Muthoot Finance, Dhampur Sugar Mills, Kansai Nerolac Paints, Zuari Industries, National Fertilizers, State Bank of Travancore, PTC India Financial Services, Shanthi Gears. Trend in FII flows: The FIIs were net buyers of Rs.5.63bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of Rs.2.54bn, as per the provisional figures released by the NSE. Global Data Watch today: Japan Vehicle Production (Jun), Japan Overall Household Spending (Jun), Japan Unemployment Rate (Jun), Germany Retail Sales (Jun), Spain GDP – Estimated (Q2), UK Halifax House Prices (Jul), Spain HICP (Jul), Portugal Consumer Confidence (Jul), UK Consumer Credit (Jun), UK M4 Money Supply (Jun), EU Business Climate (Jul), EU Consumer Confidence (Jul), EU Economic Sentiment Indicator (Jul), EU Industrial Confidence (Jul), UK CBI Distributive Trades Survey – Realized (Jul), French 10-year Bond Auction, US Dallas Fed Manufacturing Business Index (Jul), UK Gfk Consumer Confidence (Jul)