COVID Fight Tougher in Europe, Dollar Quiet
MARCH 16, 2021
The U.S. Dollar did not move a whole lot overnight, staying within levels traded yesterday as the global market awaits developments on vaccine rollouts as well as the commentary to be provided by central bankers tomorrow through Friday as the Bank of Japan will close out the week.
Although there are some negative items, particularly out of Europe with faulty vaccinations, the equity world still advanced as the pandemic damage is starting to be mended. Indeed, the fact that the U.S. is handling the situation well at the moment gives hope that the rest of the world can follow and that the robust outlook set by the Organization for Economic Cooperation and Development (OECD) for growth is a realistic one.
Retail Sales this morning revealed that February was way worse than expected in purchases as the contraction was worse than expected at (-3.3%) over the estimated (-0.50%). Industrial Production will be coming out at 10:15 AM. Oil prices are going up as demand is expected to increase along with a possible increase in production from Iran as sanctions start to be lifted. The buck is looking steady in comparison to most items.
What to Watch Today…
- Industrial Production 10:15 AM
The Euro is trading tightly currently but could see some movement as we gauge reaction from investors and traders about the ongoing havoc in the inoculation efforts. Astra-Zeneca, the manufacturer of most of the vaccines for EU distribution has been suspended right as European leaders are ready to join a regional health summit to discuss and resolve the current crisis. Germany, France, and Italy have stopped giving the vaccine, in a move that creates a bad picture for the economic recovery. We shall see how this evolves and if it indeed will play against the shared currency. As far as European equities go, they ignored the bad news and inched forward.
The Pound slightly weakened as the momentum is on the buck’s side and there have been some economic problems related to the financial sector in London. Nevertheless, Bank of England governor Andrew Bailey spoke to the BBC ahead of Thursday’s BOE meeting in a rathe positive tune. When questioned about issues with inflationary growth and the rise in treasury bond yields, Bailey said everything going on was according to plan since the economic recovery ultimately lifts up everything and is due after a year of inactivity and uncertainty. Sterling is volatile as its neighbor EU struggles with COVID and the new trade arrangement.