Juliana Calil
05/11/2021
Highlights
It is important to note that, in recent years, rising inflation expectations helped the USD, as investorsthey assumed that interest rates would be high in response to higher prices. That is no longer the case. The increase in inflation,according to the Fed, it will be transitory, and even necessary, for the resumption of the post-pandemic North American economy. The EDFwill keep interest rates low, even though the inflation that will be released tomorrow comes above estimates, around 3.4%, which isthe highest level observed since September 2013.
However, the high observed in commodity prices, which increases the cost of raw materials, added to problemsobserved in the supply chain, which is causing material shortages, are raising concerns that ahigh inflation can be long-term, not transitory, as the EDF preaches.
Some comments by Robert Kaplan, president of the Dallas EDF, reinforced the possibility of excessive inflation risingin the country: “We are now at a point where I am seeing excesses and imbalances in the financial markets,” he saida few days ago.
DXY, in today’s session, broke the 90 point barrier three times, and closed at 90.2, practically stable. The USDJPY ishovering close to $ 108.7. The USDCHF of $ 0.9037. Gold is trading at $ 1,837 an ounce, and silver at $ 27.6 an ounce.
The main facts observed by investors at the moment are:
COVID-19
The US FDA has authorized the use of the Pfizer / BioNTech vaccine in children aged 12 to 15 years. This is the first steptowards the immunization of children, which will allow states to resume face-to-face learning in schools, openingway for a new reopening of the economy.
MACROECONOMY
Data that showed that, in April, in China, consumer inflation reached the highest increase in the last sevenmonths and producer inflation rose at the fastest rate in three and a half years.
Wholesale price inflation in Germany has peaked for a decade.the monthly ZEW Economic Sentiment Indicator for the Eurozone, in May / 2021, jumped 17.7 points. Wasthe biggest reading since February 2000, amid optimism about the reopening of economies toAs vaccinations gain strength and the third wave of COVID-19 is slowing. In May, 84.5% ofinterviewed analysts predicted an improvement in economic activity, 15% did not expect changes,while 0.5% expected deterioration.
The Redbook index, which measures US retail, increased 13.30% in the week ended May 8, 2021compared to the same week last year.
The number of vacancies in the United States increased by 597 thousand in March 2021 in relation to the monthprevious year, positively surprising the market. Jobs were created mainly in the sectors ofaccommodation and food services (+185,000); state and local government education (+155,000); and arts,entertainment and recreation (+81,000). Meanwhile, job vacancies have declined in healthcareand social assistance (-218,000).
The NFIB Index of Optimism for Small Businesses in the United States increased by 1.6 points compared to theprevious month in April 2021, the highest level since December, despite remaining below pre-existing levelspandemic. Optimism among small business owners was supported by the reopening of theeconomy, with companies saying they saw sales growth, but having difficulty infind qualified workers to fill open positions. The gain trend indicatorover the past three months has increased by 8 points and the percentage of those who plan to makecapital in the next three to six months increased by 7 points. The number of owners who see the stockcurrent ‘very low’ continued to rise to historically high levels, while the percentage ofowners who expect better business conditions in the next six months fell 7 points. THE percentage of respondents who increased average selling prices increased by 10 points, to 36%, thehighest reading in decades.
ACTIONS
European markets closed down on Tuesday, with the DAX index falling more than 2%, due to theinflation concerns. On the corporate front, Thyssenkrupp increased its guidance to 2021 throughsecond time in three months, while E.ON posted a profit and K + S raised its profit forecast.
The S&P 500 closed with a drop of 0.87%, but it had fallen about 2% at the day’s low. The Dow Jones IndustrialAverage fell 1.36%, or 473 points, and the Nasdaq Composite fell 0.09%, but it had fallen more than 2% during thesession with the fall in the stocks of the technology sector.
Source:http://wintrademarkets.com
