We could be in for another rocky week in the markets with particular focus back on the central banks as we get the latest monetary policy decisions from the Federal Reserve and Bank of Japan, the latter of which is expected to announce new stimulus measures.
Expanding Quantitative Easing could see the European Central Bank owning up to 25% of the 7 trillion euro government bond market, analysts estimate, exacerbating worries about bond scarcity and thin market conditions.
The European Central Bank delved deep into its remaining arsenal of stimulus options on Thursday, cutting all three of its interest rates and expanding asset-buying to boost the economy and prevent ultra-low inflation becoming entrenched.
Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, says the next big monetary and fiscal move should include an airdrop of money from helicopters to stimulate the U.S. economy.
There is firm support for a deposit rate cut within the European Central Bank's Governing Council but appetite for more radical action is still limited, conversations with policymakers indicate a month before the March rate decision.