U.S. Dollar Tight as Markets Look for a Spark
MAY 26, 2021
The U.S. Dollar is moving within familiar ranges with markets also relatively quiet while the crypto world keeps getting mixed sentiment.
Iran is banning the mining of crypto while some in the enigmatic world are said to sign an agreement on energy-use reduction. Inflationary concerns in the past month have caused a debate over whether the outlook for economic growth will be impacted negatively or not at all as just part of the recovery. Meanwhile, the Fed and other central banks’ policy members are basically in unison that the pace of growth should pick up and that in the meantime nothing should be done to taper off.
Ultimately, stocks want a reason to keep growing, but Q1 excitement is looking hard to match. Bankers and other beneficiaries of the rally in equities will face Congress today as they try to give testimony of why their profits have skyrocketed yet labor is struggling. The Democrat-led panel will be a spectacle to watch with Senator Elizabeth Warren anticipating the “grilling.”
Commodities continue to slide as China remains resolute on combating irrationality in pricing and bottlenecks in production. We will likely see more action tomorrow as we get to digest a slew of data including Gross Domestic Product growth, Durable Goods Orders, and other consumption.
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The Euro is still trading around its best levels over the buck since January as stocks have manifested the positivity behind lifting many restrictions as the continent tries to fully reopen, even welcome foreign tourists. Business readings are also reflecting the fact that EU leadership predicts the entire population can be vaccinated by end of September. The optimism is certainly being met with trouble in other forms as European leaders look for ways to make a point against Belarus for forcing a plane down to conduct a politically based arrest. The reaction keeps getting stronger, more alarming, and leaders seek unison in response as Russia looks to be siding with Belarus’ Lukashenko and his regime’s ways.
The Pound is quiet as the U.K. copes with re-opening and questions over what the Bank of England will do about inflation. BOE Governor Andrew Bailey gave testimony to Parliament that they are not concerned about spikes in inflation, however, Chief Economist Andy Haldane stated that there is a bigger risk from it than just affecting labor. There is also a campaign under way to paint Prime Minister Boris Johnson as incompetent with evidence to be presented by a former aide, Dominic Cummings. We shall see how much havoc this can really initiate.