If equity markets continue to rebound, as we expect, central banks are likely to view this as a welcome sign of reflation and indicative of a recovery that is progressing towards a sustained expansion.

And if the US dollar continues to depreciate, the Fed won't have to worry about more QE. It's not just against the major currencies that the dollar is weakening; it is also against the minor ones where, for the most part, forecasts for GDP growth are continuing to be revised up. This is particularly helpful for the S&P 500 which, like the FTSE 100, has a sizable proportion of revenues generated from the developing world - though not as sizable.

David Fuller's view I would not be surprised if the Fed has targeted equities as part of its QE programme, as it would make sense.

Extremely low Treasury bond yields, which the Fed has engineered to recapitalise the banking sector via the yield curve over the last two years, have encouraged a view that the US economy faces only deflationary risks.

While I maintain that this is not the case, the perception will be a concern for the Fed because it can slow economic recovery. However, the Fed knows that a stronger stock market will be viewed by the financial media and public as a sign of economic recovery. Wall Street's improved stock market performance this month, led by the Nasdaq 100 Index, can only have helped sentiment.