Aug 11 2021 0
From China to Europe, here are the most important events of the day that any forex traders must be aware of.
- The Fed is very actively communicating about future tapering.
- The USD continues to climb, hitting a 4-month high against the EUR as strong US economic data reinforces the prospect of an early Fed policy tightening.
- Bitcoin is on the rise again, boosted by news that US lawmakers have reached a compromise on crypto tax terms. This shows that the cryptocurrency sector is becoming more and more popular and recognized.
- Oil prices rebounded on Tuesday but market sentiment remained weak on concerns about a growing number of Covid-19 infections, mainly in China, which will limit oil demand.
- The US Senate passed a new stimulus package worth $1.2 trillion.
Big spending package
The Senate has passed a $550 billion infrastructure plan that would represent the biggest spending boom on US public works in decades. The bipartisan 69-30 vote marks a significant victory for President Joe Biden's economic agenda. The bill, which still faces hurdles in the House, is expected to be implemented on September 20. If the package is completed through both houses, it will include new spending on roads and bridges, grid upgrades. power and broadband expansion. However, the crypto industry did not win a change to the crypto tax reporting rules in the bill. In another development in US politics, Andrew Cuomo announced his resignation as governor of New York, bowing to pressure to leave office or face impeachment after numerous allegations of sexual harassment. "In my mind, I've never crossed the line with anyone," he said.
Asian stocks look set to follow equities higher as investors gauge the economy's ability to sustain less stimulus and the virus outbreak intensifies. Treasuries slipped while the dollar edged higher. Futures markets showed modest gains in Japan and Australia, and declines in Hong Kong. Crude oil has bounced back from three-week lows on bets that the global demand recovery will remain intact despite the rapidly spreading Delta variant. And Bitcoin is back above $45,000 amid investor enthusiasm for the digital currency. The $100,000 BTC prediction is once again in vogue.
As Chinese investors search for clues as to what industries might be next targets in President Xi Jinping's crackdown, they are also weighing another question: Why now? Leading China observers gathered by Bloomberg pointed to a range of factors driving the crackdown. But two points in particular stand out in explaining why this is happening now rather than five or 10 years ago: The push for self-reliance as the ideological divide with the US becomes more entrenched. , and Mr. Xi's own consolidation of power ahead of a five-year leadership reshuffle in 2022, at which he will extend his rule over the country indefinitely. At present, no one knows how far Xi will go.
A push from Delta variant
Asia's economies have shown a hit from the burgeoning Delta variant of Covid-19 as consumers stay home and planes "idle" on the tarmac. Flight capacity in China is pointing to a drop in tourism, manufacturing in Southeast Asia is taking a hit and Australian business sentiment has collapsed. Goldman Sachs, JP Morgan economists are warning of a "negative Delta variation in Asia" and have lowered their growth forecasts for China. Meanwhile, the Delta variant is forcing US hospitals to allocate intensive care beds. Japan has now performed 100 million injections. and Germany ended a free trial to encourage people to get vaccinated.
Chip shortages that have held back car and computer manufacturers are getting worse. Chip delivery times, the gap between semiconductor ordering and delivery, increased by more than eight days to 20.2 weeks in July from the previous month. That gap has been the longest waiting period since the company started tracking data in 2017. Shortage of microcontrollers, logic chips that control functions in cars, industrial equipment and home electronics, spiked in July.