B. Gross: Danger of recession if banks are aggressive in their policies

Highly leveraged world economies, including the US, are at risk of recession, if central banks around the globe are approaching too aggressively in terms of their interest rate policy, believes the "bond king" Bill Gross.
In his latest letter to clients, Gross who is managing $2.1 billion in the Janus Henderson Global Unconstrained Bond Fund, said that the Fed and other central banks around the world should not rely on historical interest rates in a world of "extraordinary monetary policy."
"The attachment of Yellen, Bernanke, Draghi and Kuroda, as well as the other central bankers to the standard economic models, have destroyed the capitalism we have known. There is a danger of the occurrence of unknown consequences in the coming years," Gross said in his letter.
Gross refers to Yellen's predecessor Ben Bernanke, ECB chief Mario Draghi and the Japanese central bank Haruhiko Kouroda to make a warning.
According to Gross, over the past 25 years, three US recessions have matched flat yield curves between quarterly and 10-year US bonds.
"In view of the current 80 basis point spread, which is still far from the spread of 0 points, economists and some Fed officials do not see the danger of recession," Gross said.
Monetary policy, however, following Lehman Brothers bankruptcy in 2008, was "unconventional" and failed to stop buying bonds, despite warnings that a collapse in bonds is "around the corner," said Gross.
"While governments and the US can afford the extra cost of this policy, leverage companies and US investors can not," said Gross.

Comments of Sberbank CIB on incentives

The positive mood in the market is a result of a combination of impulses coming from the leading economies in the form of incentives, say analysts.
According to recent data the Japanese Prime minister Shindzo Abe planned package of fiscal stimulus to the economy in the volume of 20 trillion yen, as in the discussion of policy initiatives will participate former head of the Federal Reserve Ben Bernanke (the adoption of the decision was scheduled for July 29).
In addition, investors welcomed the quick nomination of Theresa May as prime minister of Britain. It came om Tuesday. At the same time the Bank of England last Thursday announced the easing of monetary and credit policy, such action by the ECB can be expected in the third quarter.

In case of Brexit - intervention by the Bank of Japan and the Bank of England

There is a high probability of intervention by the Bank of Japan and the Bank of England in case of Brexit.
Alan Ruskin - currency strategist at Deutsche Bank (DE: DBKGn), considered: "If the British referendum will lead to a drop in the dollar/yen below 100.00, the most likely scenario reaction of the Japanese financial authorities will be currency intervention. Japan will intervene under the guise of Brexit, having received in this case compelling arguments in the form of emergency and dramatic tightening of conditions which reflect the international volatility, not the internal situation. The Bank of England is also unlikely to be "waiting" if the pound against the dollar will fall below 1.30 and will continue to decline, the Bank of England will have a reason for the currency intervention and the ECB and the Fed is likely in a sign of solidarity may accede to it."
The probability of ECB intervention is low, because the eurozone is unlikely in the case of Brexit become the epicenter of the movement of assets.
And the Fed could to intervene only in the event of a significant tightening of financial conditions in the United States, which is also not expected.