FOMC Meeting Later, COVID Causing Worry
JULY 28, 2021
The U.S. Dollar is moving in tight ranges ahead of today’s Federal Reserve meeting and press conference.
Treasury bond yields seem on the rise while equity markets have mixed feelings as tech giants do outstanding in earnings reports while Chinese firms declined further. The global recovery seems to be ailing, particularly in Asia where the delta variant is affecting the Olympic host Japan, as well as Thailand and Taiwan which are seeing daily records in infections.
Mask-wearing requirements are being reconsidered around the country as U.S. President Joe Biden decided to require it from White House staff. In the U.S., rural areas with low vaccination rates are being impacted the most, but now urban centers such as New York City and Los Angeles are also seeing their numbers climb again. The “Summer of Joy” is at peril.
FOMC announcement will be at 2 PM and Gross Domestic Product figures for Q2 will be out tomorrow morning. Expect some action as doubt grips markets regardless of some companies performing better than expected. At the current pace, it would take the U.S. another nine months to get to 70.0-75.0% of the population vaccinated.
What to Watch Today…
- No major economic events are scheduled for today
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The Euro-zone is also being hit by the new more contagious variant as countries restarted imposing quarantines as places like The Netherlands started seeing worrisome flare-ups. While the continent has mostly tried to re-open, consumers and business leaders are starting to lose confidence as evidenced in the Gfk Consumer Sentiment survey as well as other national polls like in France showing a dip from the optimism witnessed earlier months.
Additionally, markets feeling pressure could translate into another dip for the Euro which at the moment has recovered losses from the past two weeks.
Sterling is having a positive time while others dwindle as the U.K. caught a break from post-Brexit troubles after the EU decided not to pursue further legal action over changes to the trade agreement with Northern Ireland. Also, while the rest of the world struggles with COVID, infections continue to fall in Britain.
Furthermore, the government wants to make it easier for vaccinated people from the U.S. and EU to visit. We shall see how long the “jubilant” times last for the U.K., which could see trouble again at any time moving forward.