Market

Marketmind: Pandeconomics part 2 By Reuters

© Reuters. FILE PHOTO: European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski/File Photo

A look at the day ahead from Julien Ponthus.

Slowly but surely, global policymakers are entering a new phase of their economic response to the pandemic.

The rise in inflation, for one, may persuade central banks to speed up their stimulus exit plans.

U.S. consumers’ expectations for inflation are at the highest since 2013 while a market gauge of future euro zone inflation has risen to mid-2015 highs.

The ECB has already decided to slow, at least temporarily, the pace of bond-buying while in the United States, the question is how soon the Federal will announce stimulus tapering plans. U.S. annual inflation data, due later in the day and forecast at 4.2%, may show the way.

Even Australia, where inflation is far below target, has not blinked while proceeding with bond-buying plans

Nor is fiscal tightening out of the question in the policy guide book. Britain is at the vanguard of announcing tax hikes to restore public finances while U.S. Democrats are mulling a rollback of Trump-era tax cuts that benefited wealthy companies and individuals.

Market impact? A U.S. corporate tax increase to 25% and the passage of about half of a proposed increase to tax rates on foreign income, reduce earnings by 5% in 2022, Goldman Sachs (NYSE:) estimates.

Meanwhile, the competition landscape which allowed tech giants to thrive in the last decade is also shifting.

On Friday, a U.S. judge stopped short of labelling Apple (NASDAQ:) an “illegal monopolist”, while a Dutch court’s ruling that Uber (NYSE:) drivers are employees follows a similar judgement in Britain.

China too continues to clobber its tech firms, telling them to end their practice of blocking each other’s links on their sites.

Graphic: US inflation – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkyynmvq/Pasted%20image%201631601618640.png

Key developments that should provide more direction to markets on Tuesday:

— Evergrande warned of default risks amid plunging property sales; JD (NASDAQ:) Sports Fashion reported record earnings in H1; British online supermarket Ocado (LON:) reported a 10.6% revenue decline

— UK payrolled employment rises by record 241,000

— RBA committed to low rates

— Indonesia pledges to keep rates low

— Japan’s Q3 growth forecast more than halved

— G20 finance and central bank deputies meet

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button