The Leaders are trying to control the slow down not by credit expansion anymore but by fiscal tools, yuan devaluation and lower interest rates. The Chinese government is trying to even things out and the forecast 7 per cent GDP growth is in danger. In China, the economic growth is already slowing down in addition, yuan depends on the US dollar, which means that the strengthening dollar is slowing ChinaвЂ™s economy even more.

It is certainly worth observing the events from ChinaвЂ™s point of view as well. No wonder, European stocks attract traders and by that are able to catch up to the United StatesвЂ™ market. This would not be so bad if Europe had 2-3 per cent GDP growth and corporations could produce a 10-20 per cent more profit. This yearвЂ™s European news will be all about the fear of deflation but starting from 2016, inflation might appear in the euro zone. However, it seems that this intense dollar strengthening or rather euro weakening is good for Europe, as it increases European corporationsвЂ™ competitiveness, corporate profits (as well as listed companies profit) and by that having a positive impact on boosting European economic growth. This can also have an impact on stock prices. The lionвЂ™s share of multinational corporationsвЂ™ real earning is mostly outside of the United States, which means they will have less earning in US dollar because of the strong dollar. Moreover, the strengthening dollar can have a negative impact on the GDP growth rate (a 2-2.5 percent GDP growth is still possible) not to mention listed companiesвЂ™ profit possibilities. There will not be any inflation in the United States (the oil price fall have already had a negative impact on it), the strong greenback (that seems to be stable) might be able to keep inflation under the ideal 2 per cent in the next couple of years which means that FED will not hurry increasing rates and it might happen that contrary to market expectations there will be no rate increase in 2015 (or only maybe at the end of the year the earliest). In addition, if this dollar strengthening trend continues it can seriously affect other economic regionsвЂ™ chances for the next years. US dollar index has strengthened by 25 per cent since 2014 first semester. No wonder, as during these past month significant changes has happened in the macro economy.

We got almost what we had expected from Federal ReserveвЂ™s policy meeting on 18th March even though the leaders of FED refrained from raising interest rates in the future.

Shadow president scenarios