While investors await the beginning of the earnings season starting this afternoon with the release of the latest results from Alcoa Inc., Central Banks continue to be at the center of investors’ attention.

On Monday the Reserve Bank of Australia (RBA) announced its decision to maintain its reference interest rate unchanged at a record low of 2.25%, in defiance of traders and analysts that had largely forecasted an additional cut within the first quarter of the year. The Australian economy has been struggling with declining commodity prices and a slowdown in Chinese demand for natural resources which represent the largest share of the country’s exports. In addition, the prolonged slump in oil prices has also been putting downward pressure on the Australian economy and the country’s inflation. If on one hand markets expect the RBA to implement additional monetary easing measures to fight and avoid a widespread economic slowdown, on the other hand policy makers and RBA’s officials are concerned that further easing could potentially continue to inflate houses and property prices which have been booming over the last 12-14 months. Investors will be also paying particular attention to the official jobs and inflation data, due later this month, hoping to receive some hints on whether the Australian Dollar is likely to continue depreciating against the US dollar. Shorting the Aussie against the Dollar has been, so far, a winning trade, with the Aussie losing around 19% over the past 6 months.

Overnight, as it was widely expected, the Bank of Japan (BOJ) also left interest rates and QE measures unchanged, with Governor Haruhiko Kuroda confirming that the BOJ will continues to inject around 80 trillion Yen a month into the economy. This is consistent with the Central Bank’s attempt to support inflation and to maintain the country’s currency at record lows which in turns should continue to support exports. Analysts seem to believe that Japan’s central bankers will be reluctant to act in the first half of the 2015, due to the distortion in economic data caused by the new sale tax being introduced in April, and therefore they are forecasting that any adjustment to the current monetary policies would likely be undertaken after the summer..

With Japan’s fixed income markets offering yields close to zero across the board, Japanese investors have begun to shift into equities and foreign bonds markets. The Nikkei 225 Index, the most watched Asian equity index, is currently at all-time highs, and it has returned in excess of 35% over the past 12 months. Reports also indicated that Japanese investors have been pouring fresh money into US Treasuries which continue to offer attractive yields, when compared to domestic government and corporate bonds, while also offering additional capital gains potential should the Dollar appreciate further against the Yen.

In contrast, US investors seemed to have partially exited domestic investments to move money into European markets where equities were trading at a discount respect to US’s record high valuations, and bonds have started to benefit from the ECB open market purchases. Despite prices being pushed higher by Central Banks’ intervention, investors seem to believe there is still room for capital appreciation. And investors have not been the only ones shifting to Europe, US corporate entities seemed to have followed suit: thanks to the ECB recent monetary easing, Mario Draghi has made borrowing so cheap in Europe that overseas companies have been selling record amounts of debt within the European debt market. Bank of America has estimated that around 65% of the EUR 60 billion of investment-grade bonds sold in March had been issued by foreign companies, most of which are indeed US based firms.